How does each market structure respond to price changes of the products that they sell?

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Indicate how high entry barriers into a market, Are competitive pressures present in markets with high barriers to entry? Describe which market structure you would prefer for selling products. Describe which market structure you would prefer for buying products. "You have been hired as a consultant by your local mayor to look at the various market structures. Your role is to provide analysis and answers to these important questions that will help the mayor understand the structures of many of the businesses in his city”

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Here is the paper. Go through it and in case you need any editing or something additional to what i have written, you can get back to me and i will assist. Regards



Market Structure
Institutional Affiliation



Market Structure
Market structure refers to how markets are organized or characterization of markets into
groups based on how they are organized, how they compete with each other, types of products
being sold, level of competition, number of buyers and sellers, etc. Generally, there are four
different types of market structure namely: monopoly, oligopoly, perfect competition, and
monopolistic competition. These types of markets are classified based on several major
determinants which include: number of sellers, number of buyers, entry and exit barriers in the
market, level of differentiation of products or services being offered, pricing policy, and nature
of goods or services being offered (Myers & Tauber, 2011). Therese market structures are
discussed below.
Monopoly Market Structure
In a monopoly market structure, there is basically a single dominant firm, selling a unique
product which has no close substitutes. Given that there is only one single dominant firm in this
market, a monopoly has the ability to control price and quantity produced in the market. As such,
a monopoly firm has control over supply of a product and the elasticity of demand for the
products offered by a monopoly is usually zero (Varian, 1992). Firms under a monopoly are
price makers; therefore, they have total influence over the price they charge for their products.
The barriers of entry for new entrants in this market are strong. New firms find it difficult to
enter into a monopoly due to such reasons such as government licensing, huge capital
investment, control over key raw materials, complex technologies and economies of scale, and
other key factors which restrict entry into this market (Myers & Tauber, 2011). Additionally,



firms under a monopoly face downward sloping demand curve implying that firms can earn more
profits only by increasing the sales. Monopoly market structure is considered inefficient since
prices tend to be high with corresponding lower output than that which would exist under perfect
Perfect competition market structure
In a perfect competition market structure, there are many sellers and buyers. Sellers sell
homogenous products at a single prevailing market price. Firms under a perfect competition
market structure are th...

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