Market Structures
- Submitted by: jeffdigi
- Views: 2847
- Category: Politics
- Date Submitted: 04/05/2010 04:42 AM
- Pages: 8
- Report this Essay
Differentiating Between Market Structures
Abstract
Four basic market structures function world-wide to fuel the global economy. This paper reviews the four basic market structures and the effect these structures have in the economy. Additionally, this paper covers real-life companies that operate under one of the four market structures. The goal of this document is to help the reader understand how each market structure works to encourage the success of the economy.
Differentiating Between Market Structures
Prices in the economy are set by competing forces of supply and demand. When there are numerous, equally matched competitors in an industry, prices are kept low as they can go without eliminating profits. When a business gains complete control over its industry, it loses the incentive to keep prices at levels that promote efficiency (Gale, 2008). Economists study differentlevels of competition throughout different market structures. This paper will differentiate between perfect competition, monopoly, monopolistic competition, and oligopoly. Using examples of firms listed in Table 1, the authors will explore goods and services provided, barriers to entry, price elasticity of demand, and economic profits of each structure. Other economic factors vary between each different market structure. This paper will compare and contrast different types of goods and the markets they belong to; also how supply and demand affects labor equilibrium from one structure to the next. The authors will evaluate the effectiveness of Verizon Wireless as a monopolistic competition. The author will also identify factors that affect labor supply and demand for Verizon Wireless.
Types of Markets
The perfect competition market structure is competitive to the point that any individual buyer and seller have negligible effect on the market price; for example: Dole Food Company in the produce market. Many competitors in the produce market offer the same...
Abstract
Four basic market structures function world-wide to fuel the global economy. This paper reviews the four basic market structures and the effect these structures have in the economy. Additionally, this paper covers real-life companies that operate under one of the four market structures. The goal of this document is to help the reader understand how each market structure works to encourage the success of the economy.
Differentiating Between Market Structures
Prices in the economy are set by competing forces of supply and demand. When there are numerous, equally matched competitors in an industry, prices are kept low as they can go without eliminating profits. When a business gains complete control over its industry, it loses the incentive to keep prices at levels that promote efficiency (Gale, 2008). Economists study differentlevels of competition throughout different market structures. This paper will differentiate between perfect competition, monopoly, monopolistic competition, and oligopoly. Using examples of firms listed in Table 1, the authors will explore goods and services provided, barriers to entry, price elasticity of demand, and economic profits of each structure. Other economic factors vary between each different market structure. This paper will compare and contrast different types of goods and the markets they belong to; also how supply and demand affects labor equilibrium from one structure to the next. The authors will evaluate the effectiveness of Verizon Wireless as a monopolistic competition. The author will also identify factors that affect labor supply and demand for Verizon Wireless.
Types of Markets
The perfect competition market structure is competitive to the point that any individual buyer and seller have negligible effect on the market price; for example: Dole Food Company in the produce market. Many competitors in the produce market offer the same...