Create a table that compares and contrasts the various elements of the four market structures. Format of the table should be
a) perfect competition
c) monopolistic competition
d) oligopoly and then use the following heading to help explain the basis for the market characterization
a) example of a firm
b) goods or services produced by the firm
c) barriers to entity
d) numbers of firms
e) price elasticity of demand
f) economic profits ( is there a presence or profit yes or no)
The response addresses the queries posted in 3031 words with references.
//Before writing a detailed description about various market structures, we have to understand the market and its importance in the business and economic environment. So, we will write about the concept of market and its role under the heading of introduction, for example: //
Orderly, the term market refers to a place where goods are purchased and sold. In general, the market could be defined as a place where there are many sellers and buyers of different products who are actively engaged in buying and selling acts. The level of the production of any commodity depends upon structure of its market. Possible outcomes of sales, revenues, profits and prices are planned under market structures. The firm demand curve of the industry demand curve is expected to depend on things such as number of sellers in the market and similarity of their products. These are aspects of market structures, which may be called characteristics of market and generalization that are likely to influence firm's behavior and performance (Misra & Puri, 2005).
There are many other aspects of the market structure that may influence behavior. These include the ease of entering the industry, the nature of size and purchase of the firm's products, and the firm's ability to influence demand by advertising. To reduce the discussion to manageable size, economists have focused on a few theoretical market structures that are expected to represent a high proportion of the cases actually encountered in market society. In this proportion, there are four types of market structure: Perfect competition, Monopoly, Monopolistic competition and Oligopoly (Mathur, 2005).
//Above, we have discussed about the market and its role in the business environment. Now, as per the directions, we will talk about the various structures of market. To assist you in right and effective manner, I am giving you an overview about the various structures and their features in the tabular form. This will provide an easiness to understand the various characteristics of the different market structures. //
Different Market Structure at a Glance
Points Of difference Perfect Competition Monopoly Imperfect Competition
Number Of Sellers Very Large One Large A few
Product Homogenous One Product Product Differentiation Similar or Product Differentiation
Price Uniform Single Price and Price Discrimination Different Different
Entry Free Entry Restricted Not Absolute Freedom Not Absolute Freedom
Mobility Perfect Partial Partial Partial
Price Elasticity of Demand Perfect Elastic Highly Inelastic Less Elastic Less Elastic
Knowledge of the Market Perfect Knowledge Partial Knowledge Partial Knowledge Partial Knowledge
Selling Cost Nil Nil Exist Exist
AR & MR Horizontal & AR=MR Both are different: AR>MR Both are different: AR>MR AR is Indeterminate
MC MC=AR (Price) MC<AR (Price) MC<AR (Price) MC<AR (Price)
Transportation Cost Nil Exist Exist Exist
Price Determination By Industry Equilibrium By Firm but firm and Industry is same Firms Themselves Counter pricing
//Now moving ahead, I am giving you an impression about the perfect competition market. This information will help you to understand the perfect market and how a firm can take advantages of perfect competition market. //
The perfect competition is a market where there are large numbers of buyers and sellers of homogeneous products and the price of the product is determined by the industry. There is one price that prevails in the market all the firms sell the products at the prevailing price. Perfect competition is a market in which there are many firms selling identical products with no firm being large enough relative to the entire market so as to be able to influence the market price (Mathur, 2005). The perfect competition can be defined as a competitive system in which large number of sellers produces homogeneous and identical products for the large number of buyers (Perfectly Competition).
Example of Firm or industry: The right example in the perfect competition is the FMCG industry. FMCG means the Fast Moving Consumer Goods (FMCG). There has been an increase in the growth rate of the FMCG sector for past many years (FMCG Sector, 2006).
Numbers of firms: There are large number of buyers and seller in the FMCG sector or industry. The examples of Fast Moving Consumer Goods (FMCG) companies are Hindustan Unilever, Procter and Gamble, Sara Lee, Nestlé and Colgate-Palmolive (FMCG Sector, 2006).
Goods or services produced by the Industry: FMCG produces large number of frequently used consumer products like soaps, shampoos, cosmetics, toothpaste, tooth brush, detergents, and shaving products. The industry also produces various non-durables products like glassware, tube lights & bulbs, paper products and batteries. Pharmaceuticals, electronic goods, packaged drinks are also ...
2759 words, APA