Explain economically what kind of market the watch industry is

It is a monopolistically competitive market.

On the whole, such a market is characterized by the following:

1. A large number of vendors

There are a large number of vendors in the market, each of which is required to accept the market price to a certain extent, but each of which can exert a certain degree of influence on the market by not accepting the market price in its entirety. In addition, vendors cannot collude with each other to control the market. For consumers, the situation is similar. In this way economic agents in a monopolistically competitive market are influencers of market prices.

2. Mutual non-dependence

Each economic agent in a market assumes that he or she can act independently of each other and is not dependent on each other. One person's decisions have little effect on others, are not easily detected, and can be made without regard to the antagonistic actions of others.

3. Product Differences

The products of different manufacturers in the same industry differ from each other, either in quality, utility, or non-substantive differences (such as differences in impressions caused by packaging, trademarks, advertisements, etc.), or differences in terms of sale (

Monopolistic Competitive Markets

such as differences in geographic location, service attitudes and approaches cause (consumers are willing to buy the product of this family rather than that family's product). Product differentiation is the root cause of vendor monopoly, but because the difference between products in the same industry is not so great that the products are completely irreplaceable, a certain degree of substitutability and allow vendors to compete with each other, and thus mutual substitution is the root cause of vendor competition. If we want to accurately say the meaning of product differences, it can be said that: at the same price, if the buyer of a manufacturer's products show a special preference, it is said that the manufacturer's products and other manufacturers in the same industry have a difference between the products.

4. Ease of Entry and Exit

It is relatively easy for manufacturers to enter and exit an industry. This is similar to perfect competition, the size of the manufacturer is not very large, the capital required is not too much, the entry and exit of an industry obstacles are not too easy, relatively easy.

5. Product groups can be formed

Multiple product groups can be formed within an industry, i.e., manufacturers producing similar goods within an industry can form groups, with a greater degree of product differentiation between these groups and a smaller degree of differentiation between products within the groups

This is similar to perfect competition.