Differentiating Market Structures :Elizabeth Andaver

Topics: Economics, Monopoly, Supply and demand Pages: 2 (1349 words) Published: October 26, 2014

Differentiating Market StructuresElizabeth AndaverdiECO 365May 8, 2014Edward PriceDifferentiating Market StructuresMarkets are different, without these different markets there would not be any structure. Being able to understand different markets and its language, like demand, supply, average variable cost and marginal costs we can better prepare for economic and financial future. The market structure and the interaction that occurs can be defined by the number of businesses, and barriers new firms have when entering a particular market. Perfect competition, monopoly, monopolistic and oligopoly are four forms of market structures recognized by economists. Private goods are excludable, like food, clothing, toys, furniture, and cars, which are types of goods that can be rival and non-rival. An example, rival goods are types of goods that consumer prevents the usage of the goods at the same time, durable goods and the usage can be shared with others. However, in contrast the rival goods can be unendurable such as food, once eaten, cannot be reused. In contrast, non-rival goods can be consumed by the consumer and will not prevent simultaneous consumption by others. These kinds of products are broadcast TV as when in use in one place does not prevent it from usage in other places. Natural monopoly represents the single source of a product and that no other industry can expand the supply such as water, electricity, and natural gas. The cost of possessing a firm such as water and power is so high that it is not profitable to build another firm to compete. Typically natural monopolies are utilities, which are regulated by the government to prevent them from exploiting with high prices. Natural monopoly should not be compared to Monopoly, as monopolies are normally short-lived because the technological advances developing competition for an industry. “Economists define a public good as being non rival and non excludable.” (econport.org, 2006) This means that the good is...

References: Colander, D.C. (2010). Economics (8th ed.). New York, NY: McGraw-Hill.
<www.econport.org> 2006. Market Structures. Experimental Economics Center. Georgia State University
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