Differentiating Between Market Structures Simulation

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As each of us wake up every morning, there are specific items that we need to have in order to live our daily activities. Most of us began by having breakfast, getting ready for work; go to our jobs, and so on. Freight transportation is an essential part of how all of the necessary items reach our homes and make our lives much easier in order to live our lives. The freight transportation is an essential part on moving this country’s or for that matter any country’s economy. Any commodity has a chain of transportation and distribution that delivers to their customers. There are various markets in which a freight transportation company operates. These include perfect competition, monopoly, monopolistic competition, and oligopoly. For each of these markets we are able to identify and interpret cost and revenue curves. In the “Differentiating between Market Structures” simulation we were able to see all of these factors; as well as able to see the advantages and limitations of supply and demand for the different market structures. The first structure that was discussed was the Perfect competition. Here the Perfect competition is characterized by many buyers and sellers, many products that are similar in nature and, as a result, many substitutes. “Perfect competition means there are few, if any, barriers to entry for new companies, and prices are determined by supply and demand. Therefore, producers in a perfectly competitive market are subject to the prices determined by the market and do not have any influence” (Investopedia, 2006). For example, in a perfectly competitive market, should a single firm decide to increase its selling price of a good, the consumers can just turn to the nearest competitor for a better price, causing any firm that increases its prices to lose market share and profits. Another market structure is called a monopoly. It is a market structure in which there is only one producer/seller for a product. In other words, the single...
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