StudentShare
Contact Us
Sign In / Sign Up for FREE
Search
Go to advanced search...
Free

Compare and contrast - Essay Example

Cite this document
Summary
Market structures are grouped based on various characteristics, this include; the number of firms in the industry , similarity in good or service offered by firms in the industry and ease of entry into the industry by new firms. The four main market structures that may exist in…
Download full paper File format: .doc, available for editing
GRAB THE BEST PAPER92% of users find it useful
Compare and contrast
Read Text Preview

Extract of sample "Compare and contrast"

Market Structures Assignment Market structures are grouped based on various characteristics, this include; the number of firms in the industry , similarity in good or service offered by firms in the industry and ease of entry into the industry by new firms. The four main market structures that may exist in the economy are perfectly competitive markets, competitive monopolistic, oligopoly, and monopoly markets.The short run profits in competitive markets are realized at a point where the marginal costs are equal to the marginal revenue.

Due to the ease of entry in the competitive market, the firms cannot sustain economic profits in the long run (Graph A1 and A2). This fact is illustrated in the medical field in CT scan services. The CT scan machines were offering the same product and in the long run, they became unprofitable venture. This is due to the prices declining as many identical products are continually being introduced in the market. Farmers’ market is a good example of competitive market structure (Hubbard, p450).

Competitive monopoly on the other hand has dominating firm(s) that control prices unlike in perfect competitive markets. Both market structures have many buyers and sellers and the entry to these market systems are considerably similar. The entry to the both market structures is significantly easy. The only difference is the product being sold. In competitive market, the products are similar in all aspects while in competitive monopoly, the products are differentiated. Starbucks and other coffee houses compete in a competitive monopolistic market structures.

They offer the same products but adequately differentiated (Hubbard, p465). Competitive monopolistic firms also offers prices that are greater than their marginal costs. In the short run, competitive monopolistic firms should have marginal revenue below its demand curve to realize profits. In the long run, competitive monopolistic firms make profit if their total revenue is greater than their total costs (Graph B1 and B2).Oligopoly differs from competitive monopoly and competitive market structure in the ease of entry.

Entry into oligopoly market structure is considerably hard because of the barriers of entry present in the market. Companies like Microsoft and Google fall in this category. New firm venturing into this market experience stiff competition among other barriers and its survival is barely minimal. This because, Microsoft and other firms in this market structure have economies of scale and there are also several governmental imposed barriers to such entry . The prices in oligopoly can only be analyzed using game theory.

Firms in this market system alter their prices in relations to their competitor’s prices (Hubbard, p475).Monopoly market is characterized by one seller and many buyers. Monopolistic firms are brought about by several factors including;I. Government regulations on the number of firms into a certain market.II. One firm has absolute control of the key resources necessary in production.III. Network externalities in supply.IV. Natural monopoly due to huge economy of scale.Monopolies control their prices and supply.

Firms like Time Warner and De Beers Diamond companies are examples of firms that were monopoly. Perfect competitive market differ with monopoly in that, a monopoly will produce less quantities and charge higher prices than a perfect competitive firm producing the same good. Monopoly is similar to oligopoly in entry of new firm in the industry. Entry in this structures as stated earlier is almost impossible (Hubbard, p485).GraphsGraph A1Graph A2Graph B1Graph B2Graph CGraph D1 Graph D2Works CitedHubbard, R.

Glenn, and Anthony Patrick Brien. Microeconomics. 4th Ed., International ed. Harlow: Pearson Education, 2013.

Read More
Cite this document
  • APA
  • MLA
  • CHICAGO
(“Compare and contrast Essay Example | Topics and Well Written Essays - 500 words - 26”, n.d.)
Compare and contrast Essay Example | Topics and Well Written Essays - 500 words - 26. Retrieved from https://studentshare.org/macro-microeconomics/1687280-compare-and-contrast
(Compare and Contrast Essay Example | Topics and Well Written Essays - 500 Words - 26)
Compare and Contrast Essay Example | Topics and Well Written Essays - 500 Words - 26. https://studentshare.org/macro-microeconomics/1687280-compare-and-contrast.
“Compare and Contrast Essay Example | Topics and Well Written Essays - 500 Words - 26”, n.d. https://studentshare.org/macro-microeconomics/1687280-compare-and-contrast.
  • Cited: 0 times

CHECK THESE SAMPLES OF Compare and contrast

Compare and Contrast images of L.A

Name: Instructor: Course: Date: Compare and contrast Images of L.... The history, culture and way of life of LA in the 1940's were much different compared to life in LA today.... How is this portrayed in Mary Helen Ponce's view from her childhood memories?... The excerpt is taken from a collection of short stories compiled by David L....
4 Pages (1000 words) Essay

An Idealized Artistic Persona

Write an essay of 1,500 words in which you Compare and contrast the depiction of the Romantic autobiographer evoked in the two passages below.... Throughout history, writers have developed numerous ways of constructing an idealized artistic persona, which can then be presented to the reader in the form of a first person narrative....
6 Pages (1500 words) Essay

Compare and Contrast General Systems Theories

Compare and contrast General Systems Theories Institution Affiliation: Date: Theories and models in history and even in the present life are to classify and illustrate information and researches with an aim of drawing conclusions.... hellip; The general systems theories in particular encompass the human concept and explain the concept of systems, how they came about and the interconnecting factors in them (Skyttner, 2001)....
4 Pages (1000 words) Research Paper

Comparison of Anime and Animation

It is because of the differences and similarities between these two that it is relevant to Compare and contrast the two for the purposes of coming up with features that distinguish them from one another.... Anime and Animation Anime can be defined as Japanese animation that covers serious and abstract topics, which are not seen in normal animation or western animation (University of Michigan, n....
6 Pages (1500 words) Essay

Compare and Contrast: HFCS and Sugar

The arguments opposed to the constant use of HFCS might have been done in good spirit for the benefit of our nation's health, but the truth is that the amounts of HFCS and sugar alike need to be decreased for any changes in our collective health to be seen.... hellip; High fructose corn syrup had once been a benefit to farmers and manufacturers, and then to consumers who found it easier to afford than sugar, but this has caused an overconsumption of both HFCS and sugar....
3 Pages (750 words) Essay

Compare and Contrast Integrated and Subjective Approach

An essay "Compare and contrast Integrated and Subjective Approach" outlines that no one could effectively dispute that education is the main edifice upon which life opportunities would rest.... It invariably determines and predicts the route charted by the youth of any nation.... hellip; Teachers need to plan their curriculum such that students are equipped with the proper skills....
7 Pages (1750 words) Essay

Explicating two poems - compare and contrast

In contrast to each poem on the other, Mitchell's poem is a petite, specific and a concise one which sounds especially optimistic.... In contrast, Riley's poem is a extensive with a comprehensive description of the place where Riley has spent his childhood.... The On the whole, to evaluate and compare poems written by two dissimilar poets on a similar matter can prove to be quite an intricate task....
2 Pages (500 words) Essay

Compare and Contrast Zombie and Vampire

According to folkloric tales, the vampire is an undead evil monster that posses great supernatural abilities and usually feeds on human blood (Divera 2014).... The vampire is utterly ruthless in its work, never sparing anyone in their path.... A zombie is a dead person revived by the… In present days, there are confusing stories and imaginations about zombies and vampires that have grown in popularity owing their widespread existence to the several fiction books and the movies that These have made the creatures to appear as if they are similar and related creatures which might not be the true....
4 Pages (1000 words) Essay
sponsored ads
We use cookies to create the best experience for you. Keep on browsing if you are OK with that, or find out how to manage cookies.
Contact Us