Sample Essay

Costco belongs to the retail and wholesale industry with a lot of competitors including giants like Wal-Mart, Target and several other companies which strongly compete to enlarge their customer base. There are no immediate restrictions of entry and exit into the retail and wholesale industry which proves as a threat to current industry members. The companies can set prices up to an extent and cannot increase prices of products above a specific level due to heavy competition in the industry.

There is a considerable amount of product differentiation as the products sold by Costco Wholesale are also sold by other companies in the industry but the quality and brand of these products may vary from company to company. There is a considerable amount of non price competition in the industry as companies apply several strategies in attracting customers other than pricing such as offering free gifts, celebrating several occasions and promoting products related to these occasions and several other strategies.  It is concluded from the analysis and comparison of these economic features that Costco Wholesale operated in a monopolistic competition economic environment.

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