Eastern Tobacco Company Essay

IntroductionWhy the east tobacco guild in Egypt is an pillow slip of monopolistic contention?Eastern tobacco participation is known as the largest tobacco plant producer in Egypt. The bon ton produces several(predicate) products such as cig arttes, molasses tobacco, pipe tobacco and cigars (Oxford care Group, 2008). Additionally, it produces other products that atomic number 18 related to cigarettes. These may accept homogenized and filter rods tobacco (Owen & Pamuk, 1998). Their blameless products are divided into two categories. These may include local and exporting products. The company is known as the largest company producing large amount of tobacco in Egypt Thus, it faces stiff emulation by local and international companies that produces tobacco.Eastern Tobacco keep company is an example of monopolistic competition (Owen & Pamuk, 1998). This is due to the accompaniment that all tobacco industry is reason in monopolistic competition. superstar of the viable rea sons that make Eastern Tobacco Company to be categorized in monopolistic competition is the position that in that respect are preferably a large number of companies that are producing the same products however, they have tell apart them. This agency that all companies under tobacco sector are conform to the market demand for tobacco (Solow, 1999).Another reason that makes Eastern Tobacco Company to be a good example of monopolistic competition is the fact that it brings out differentiate products that are reasonably close substitutes for to each one(a) other (Oxford Business Group, 2008). For instance, the company brings into the market different types of cigarettes. These may include homogenized and filter rods cigarettes. It also produces different types of tobacco, for instance, molasses tobacco, pipe tobacco.Thus, the company has one of the characteristics of firms that are categorized in the group of monopolistic competition. Due to the fact that products are of close substitutes, at that place can be any decrease of outlay. This can be seen in Eastern Tobacco Company as they can be in a position to reduce the price of their products (Owen & Pamuk, 1998). This helps them to attract large number of customers and thus, they are perceived as the largest company in Egypt producing tobacco.One of the major characteristics of monopolistic competition is the fact that there are a large number of sellers (Solow, 1999). They tend to sell differentiated products. This can be evidenced in tobacco industry, as there is quite number of sellers that sell different types of tobacco. For instance, more local companies are selling same products as Eastern Tobacco Company. Thus, there is a different seller that sells tobacco like Eastern Tobacco Company. This means that Eastern Tobacco Company have achieved this characteristics of monopolistic competition where many sellers selling differentiated products dominate the industry.Eastern Tobacco Company does not have price competition. This is due to the fact that the company has the freedom to earn over its entire customers. For instance, large number of customers prefers Eastern Tobacco Company as they offer after sales services. This is a situation where a buyer purchases large tonnes of tobacco and the company offers to take them to his or her home. offering after sales services is one way that Eastern Tobacco Company uses to attract large number of customers.From the above point of view, it is clearly evidenced that Eastern Tobacco Company has all characteristics that monopolistic competition is associated with. Thus, it can be classified as a good example of monopolistic competition. For instance, the company has similar products but has differentiated them to different brands. These may include molasses tobacco, pipe tobacco (Oxford Business Group, 2008). Therefore, it is an example of monopolistic competition.ReferencesOwen, E. R. J., & Pamuk, S. (1998). A history of Middle East economies in the twentieth century. London I.B. Tauris Publishers.Oxford Business Group. (2008). The Report Emerging Egypt 2008. London Oxford Business Group.Solow, R. M. (1999). Monopolistic competition and macroeconomic theory. Cambridge u.a. Cambridge Univ. Press.