We study the first two (of four) market structures: perfect competition and monopoly. They are at opposite ends of spectrum as far as market structures go. There are many factors that are used to differentiate these structures including: who establishes the price, the number of firms, barriers to entry, types of products, information, and how the firms maximize profits. First, give at least two examples of a perfectly competitive market and explain what characteristics led you to that decision. Second, give at least two examples of a monopoly market and explain what characteristics led you to that decision.
Public transit system in your city
-only one firm
-exclusive right to operate (i.e. no one can start another city transit)
-Clearly for public transit operators, their marginal cost is 0 (if they let one more person on the bus, they do not incur additional costs), but their MR does not equal MC, thus not perfect competitor
-they are price ...
Provide examples of a monopoly market.