Differentiating Between Market Structures
In the readings of this week we looked at some market structures and how they affect the certain areas of economic structures within the economy. In this paper we will also be exploring information given on equilibrium in relationship to the labor market, as well as an observation of the package deliver leader “UPS” We will first start with comparing and contrasting services and goods used n the different market structures.
In Economics, market goods in four different categories grouped by characteristics of being excludable or rival in consumption. Excludable basically means one person can prevent the use by another person. A rival in consumption means the use of a good by one person eliminates the opportunity for another person to use that same good. The four different groups of goods are private goods, public goods, common resources, and natural monopolies. Private goods are goods that private firms produce for profit available to people but not available to all people. Examples of private good are food, clothing, toys, furniture, and cars. According to Mankiw (2007), private goods are excludable and rival in consumption because someone can prevent some from obtaining a good and the use of a good prevents others from obtaining the same exact good. Natural monopolies are goods which are excludable but can be used without limitations. For example, a cable company can exclude people from accessing cable by charging for cable, but there is no limit on the consumption. Public goods are the exact opposite of private goods. Public goods are free, available to everyone, and there is no decrease in the availability by use of others; therefore public goods are neither excludable or rivals in consumption (Mankiw, 2007). Air is an example of a public good. In general, the intake of air by one individual does not decrease the supply of air to other...