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Summarizing the content of market structure simulation

Need some assistance in summarizing the content of this simulation according to the following questions: (at least 700 words)

1. What are the advantages and limitations of supply and demand identified in the simulation

2. Select an organization and identify the market structure for the organization.

3. Analyze how organizations in each market structure maximize profits.

See attachment to view simulation.

(Editor's note: simulation cannot be viewed using this attachment)

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Solution Preview

Just to let you know, it isn't possible to see the simulation from the file you've attached. Simulations require streaming content from the parent web site, and so cannot be saved as files. In order to view the simulation, I had to create an account at EdMap.

1. In the first simulation, you can see that in perfect competition, supply and demand work well to ensure that an efficient market outcome is reached. The company cannot gain excess profits by reducing output, become some other firm can easily take its place. The firms often face shutdown decisions, such as the one discussed, because business is so competitive.

In the second simulation, the transport company has become a monopolist. It still faces the law of demand, in that it cannot set any price it wants and still sell all the product it wants. Because a higher price will result in fewer buyers, it instead can maximize profit by reducing output to the point where MP=MR.

In the third simulation, supply and demand are limited only if ...

Solution Summary

Summarizing the content of market structure simulation and analysis of profit maximization.