Economic Market Structures
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Differentiating Between Market Structures
Sally Hansen
ECO/212
February 2, 2011
Differentiating Between Market Structures
When studying markets in an economy, there are many aspects that come into play. For example, there are different types of goods, resources, and even different types of markets within an economy. A dynamic relationship exists between supply and demand, which affects jobs, wages, and applicant qualifications. After presenting a basic understanding, these concepts will be explained through the lens of the United States military.
A public good is nonrivalrous and nonexcludable (Hubbard, & O'Brien, 2010). When one person or group consumes public goods, the amount available to all others is not diminished. No one person or group can be stopped from consuming available public goods. An example is the protection provided by municipal agencies such as the protection by police and fire departments. Nonrivalrous means that one person’s consumption of the good does not take away from another person’s consumption of the good. An example of a nonrivalrous good is an uncongested park because there is no competition for the use of it. Nonexcludable means that it is not possible to prevent a person from consuming the good. A good example of a nonexcludable good is a baseball stadium that has a fireworks show. Although only some paid for the show it is impossible to stop others outside the stadium from seeing the show.
Private goods are both rivalrous and excludable. If I eat an orange; there is one less orange for you to eat. An orange fits the criteria for a private good because it is both rivalrous and excludable. Unlike public goods private goods can be consumed by only one person and then is unavailable for all others.
A common resource is non-excludable but often is rivalrous. Examples of common resources are natural resources such as clean air, clean water, public lands, and fish in their natural habitat. Everyone has the...
Sally Hansen
ECO/212
February 2, 2011
Differentiating Between Market Structures
When studying markets in an economy, there are many aspects that come into play. For example, there are different types of goods, resources, and even different types of markets within an economy. A dynamic relationship exists between supply and demand, which affects jobs, wages, and applicant qualifications. After presenting a basic understanding, these concepts will be explained through the lens of the United States military.
A public good is nonrivalrous and nonexcludable (Hubbard, & O'Brien, 2010). When one person or group consumes public goods, the amount available to all others is not diminished. No one person or group can be stopped from consuming available public goods. An example is the protection provided by municipal agencies such as the protection by police and fire departments. Nonrivalrous means that one person’s consumption of the good does not take away from another person’s consumption of the good. An example of a nonrivalrous good is an uncongested park because there is no competition for the use of it. Nonexcludable means that it is not possible to prevent a person from consuming the good. A good example of a nonexcludable good is a baseball stadium that has a fireworks show. Although only some paid for the show it is impossible to stop others outside the stadium from seeing the show.
Private goods are both rivalrous and excludable. If I eat an orange; there is one less orange for you to eat. An orange fits the criteria for a private good because it is both rivalrous and excludable. Unlike public goods private goods can be consumed by only one person and then is unavailable for all others.
A common resource is non-excludable but often is rivalrous. Examples of common resources are natural resources such as clean air, clean water, public lands, and fish in their natural habitat. Everyone has the...