Description
In an eight- to 10-page paper, describe each market structure discussed in the course (perfect competition, monopolistic competition, oligopoly, monopoly), provide a real-life example of each market, and respond to the following for each market structure:
- Indicate how high entry barriers into a market will influence:
- Long-run profitability of the firms
- Cost efficiency of the firms in the industry
- Likelihood that some inefficient firms will survive
- Incentive of entrepreneurs to develop substitutes for the product supplied by the firms
- Are competitive pressures present in markets with high barriers to entry? Explain.
- Describe which market structure you would prefer for selling products. Explain why and support your answer with the characteristics of that market.
- Describe which market structure you would prefer for buying products. Explain why and support your answer with the characteristics of that market.
- How does each market structure respond to price changes of the products that they sell? Explain whether each market structure will be selling elastic or inelastic products, and how this will affect the market price charged.
- How does the role of the government affect each market structure’s ability to price their products?
- How does international trade affect each market structure?
The Market Structures Final Paper
- Must be eight to 10 double-spaced pages in length (not including title and references pages) and formatted according to APA style as outlined in the Ashford Writing Center.
- Must include a separate title page with the following:
- Title of paper
- Student’s name
- Course name and number
- Instructor’s name
- Date submitted
- Must use at least five scholarly sources from the Ashford University Library in addition to the course text.
- The Scholarly, Peer Reviewed, and Other Credible Sources table offers additional guidance on appropriate source types. If you have questions about whether a specific source is appropriate for this assignment, please contact your instructor. Your instructor has the final say about the appropriateness of a specific source for a particular assignment.
- Must document all sources in APA style as outlined in the Ashford Writing Center.
- Must include a separate references page that is formatted according to APA style as outlined in the Ashford Writing Center.
Explanation & Answer
Attached.
Running head: MARKET STRUCTURES
Market Structures
Candidate’s name:
Institutional affiliation:
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MARKET STRUCTURES
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MARKET STRUCTURES
Market structure can be defined as the degree and nature of competition that exists in the
buying and selling of goods and services (Tucker, 2008). Usually, market structures are
influenced by the nature of competition prevailing in both goods and services markets. In
ordinary terms, a market is a particular place where the buying of goods and services is
undertaken (Stackelberg et al., 2011). On market structures, a market might refer to a place
where buyers and sellers of a particular commodity are in direct competition with each other. By
that means, markets are categorized into different forms. They include; perfect competition
market, monopolistic competition market, oligopoly market, and monopoly market. Therefore,
this paper will be comprehensively discussing market structure types, how they interact with one
another. A detailed analysis of how high entry barriers in the market affects different firms will
also be accounted for. In so doing, the role of government and how various government affairs
impact on the market structures will be explored. At last, this paper will be investigating how
international trade affects the market structures.
Perfect competition
In a perfect completion market, both buyers and sellers are not restricted in to buying and
selling of their goods and services, usually homogenous products. Both buyers and sellers are of
large numbers, and the buying and selling of goods and services do not require any perfect
market knowledge at a time (Balasko, 2009). Hence, the individual firms in a perfectly
competitive market have no any form of rivalry with one another. Therefore, all the firms are
known to be price-takers, and there is freedom of entry and exit into and from the market
(Stackelberg et al., 2011). An Indian fish market is a good example of a perfect competition
MARKET STRUCTURES
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market because there are many sellers trying to sell similar products and at the same time, many
buyers gather to buy the same product with complete knowledge of what they are purchasing.
Characteristics of a perfectly competitive market.
One of the attributes of a perfect competition market drives to a big number of buyers and
sellers. Its buyers and sellers must be in big numbers because once they are in large numbers; no
one will have the power to influence the price of products and their output in the entire industry
(Hall & Lieberman, 2008). Hence, the demand of a single individual buyer is small that he or she
cannot influence the price of a commodity through an individual action. An individual seller is
also incapacitated to influence the price of commodity by...
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