Would Wells Fargo's market structure be
Monopolistic competition?
http://www.docstoc.com/docs/3871995/Market-Structure-and-Regulation-in-the-US-Banking-Industry
http://en.wikipedia.org/wiki/Monopolistic_competition
To determine if Wells Fargo's market structure is monopolistic competition, we need to consider a few key characteristics of monopolistic competition and apply them to the company:
1. Many sellers: Monopolistic competition implies that there are many firms operating in the market. While Wells Fargo is one of the largest banks in the United States, it is not the only bank. There are numerous other banks and financial institutions competing with Wells Fargo, suggesting that there are many sellers in the industry.
2. Differentiated products: In monopolistic competition, companies offer products that are differentiated in some way, even if only slightly. Wells Fargo, like other banks, offers a range of financial services such as retail banking, commercial banking, and investment banking. While these services may have some common elements among different banks, each bank still has its own unique features and branding. Therefore, Wells Fargo's products can be considered differentiated to some extent.
3. Ease of entry and exit: In a monopolistic competition market, it should be relatively easy for new firms to enter the industry, and existing firms can exit easily if they choose to do so. While breaking into the banking industry can be challenging due to regulatory requirements and the substantial capital needed, there is still a reasonable degree of ease for new banks to enter and compete with Wells Fargo. Similarly, Wells Fargo can exit certain markets or adjust its operations if it finds it no longer profitable or viable.
Based on these characteristics, Wells Fargo's market structure can be classified as monopolistic competition. Keep in mind that this classification is not set in stone and market structures can evolve over time.