Evaluating Market Structures
Evaluating Market Structures
Economics 212
Abstract
Many types of market structures exist, with each market structure proving more effective than the other for certain firms. If a firm choses to enter a different market structure then that firm's financial success will either diminish or flourish accordingly; the latter is usually the case regarding monopolistic competition market structures in the short run. Firms in this market structure must compete by using strategies, hiring skilled labor, evaluating their products, and differentiating their products to survive in the long run. Starbucks is an example of a monopolistic competitive firm that understands how that market structure works, thus giving them substantial profits in the past few years. Starbucks has managed to maintain its success even during unprofitable times with its other branches through customer loyalty, quality private goods, and knowing the labor market. Monopolistic competition also provides consumers with the greatest benefit of all: diversity in the world of coffee.
Evaluating Market Structures This report begins by describing the various types of goods within a market structure and comparing a natural monopoly with perfectly competitive markets. The report then explains labor market equilibrium and how labor supply and demand affects market equilibrium. Next, the report identifies Starbucks market structure and proceeds to evaluate its effectiveness, followed by the factors affecting their supply and demand. The report ends by summarizing key points.
Different Types of Goods
Private Good Goods consumed by one person and also reduce the consumption for another person are private goods (Hubbard & O’Brien, 2010, p. 148). If a person eats a piece of pie then nobody else can eat it, making the private good rivalrous in consumption.
Public Good Goods consumed by one person but do not reduce the consumption by another person are private goods (Hubbard & O’Brien, 2010, p. 467). A public good is
Economics 212
Abstract
Many types of market structures exist, with each market structure proving more effective than the other for certain firms. If a firm choses to enter a different market structure then that firm's financial success will either diminish or flourish accordingly; the latter is usually the case regarding monopolistic competition market structures in the short run. Firms in this market structure must compete by using strategies, hiring skilled labor, evaluating their products, and differentiating their products to survive in the long run. Starbucks is an example of a monopolistic competitive firm that understands how that market structure works, thus giving them substantial profits in the past few years. Starbucks has managed to maintain its success even during unprofitable times with its other branches through customer loyalty, quality private goods, and knowing the labor market. Monopolistic competition also provides consumers with the greatest benefit of all: diversity in the world of coffee.
Evaluating Market Structures This report begins by describing the various types of goods within a market structure and comparing a natural monopoly with perfectly competitive markets. The report then explains labor market equilibrium and how labor supply and demand affects market equilibrium. Next, the report identifies Starbucks market structure and proceeds to evaluate its effectiveness, followed by the factors affecting their supply and demand. The report ends by summarizing key points.
Different Types of Goods
Private Good Goods consumed by one person and also reduce the consumption for another person are private goods (Hubbard & O’Brien, 2010, p. 148). If a person eats a piece of pie then nobody else can eat it, making the private good rivalrous in consumption.
Public Good Goods consumed by one person but do not reduce the consumption by another person are private goods (Hubbard & O’Brien, 2010, p. 467). A public good is
References: Hubbard, R. & O 'Brien A. (2010). Economics (3rd ed.). Boston, MA: Pearson Hall (2010) Lawrence W