February 24, 2013
Market Structure – Page 2
According to Business Dictionary the economy is “an entire network of producers, distributors, and consumers of goods and services in local, regional, or national community.” With that being said, what roles does competitive market, monopolies, and oligopolies play in the economy? What characteristic do each one of these play in the market structure? What methods are used to determine price and output in maximizing profits for each in the market structure? Are there any barriers of entry involved in these structures? Finally, what role do each play in the market structure? In this report these points will be brought out to bring us to a better understanding of the market structure of competitive market, monopolies, and oligopolies. Let us know examine all the characteristic of each market structure. Start first with competitive market, it mains set-up is based on a large amount of sellers in the market. The bigger the size of the sellers and buyers, the least bargaining margin will be available for the market. The reason for this is because if you went to a local farmers market and three sellers were selling beautiful, large, red apple for 2 @ $1.00 and one sellers was selling the same apples for $.75, competitive market would be exercised because you would select one of the sellers with the smaller price. Now let us look at monopolies, according to AmosWeb “the four characteristics of monopoly are: (1) a single firm selling all output in a market, (2) a unique product, (3) restriction on entry into and exit out of the industry, and more often than not (4) specialized information about production techniques unavailable to other potential producers.” No secrets are shared with other sources because there is no else producing such...