Consider competitive markets, monopolies, and oligopolies. What role does each of these play in an economy? Write a 1,050- to 1400-word paper on Market Structures and Maximizing Profits. Address the following:
What are the characteristics of each market structure? How is price determined in each market structure in terms of maximizing profits? How is output determined in each market structure in terms of maximizing profits? What are the barriers to entry, if any?
What role does each market structure play in the economy?
To consider different roles in the economy we will have to look at competitive markets, monopolies, and oligopolies. We will discuss in this paper exactly how each of these roles play a part in our economy. Some of the things we will discuss are the characteristics of each of these market structures, along with how price is determined in each of these structures. Other topics will include how the output of each market structure is determined in terms of maximizing profits. The last two things we will look at are the barriers to entry if and ultimately the role in which each market structure plays in this economy. First off we will discuss competitive markets; there is a difference between a non-competitive market such as a water supply company which has no competitors and a competitive market such as a gas station where there are multiple choices for the same product. (pg.289) the characteristics of a competitive market are two main things. One being there are many buyers and many sellers in the same market, two the goods offered by multiple suppliers is largely the same. Some also include that firms can freely enter and exit this structure as a characteristic (pg.290) The price is determined by the output of the product and the market price. The math behind this would be Price times quantity of the product .This would also mean that if quantity rose by one unit total out of all the...
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