market structure-WK4-economics

market structure-WK4-economics - monopoly because there are...

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What are the characteristics of each market structure? A competitive market is many sellers that sell similar products with very little control over the market selling price. An example of competitive market structure is a gasoline station. There can be many gasoline stations in a certain mile radius, the more gasoline stations there are in a small area the higher the competitive the market. Monopolies: Monopolies are a group of business people who act as one. Considerable power is in the company’s ability to set and influence prices. The power is determined by the demand curve cladding the company and with almost no competition. Monopolies have no public ownership. When the competition is low and a company is dominating the demand curve it creates a monopoly because competition is low competition is never nonexistent, there are no other companies who can produce the same or substitute product. Microsoft would be a
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Unformatted text preview: monopoly because there are very few competitors. Microsoft is supervised by contracts and patents that create strong barriers for its potential competitors. Oligopolies: Oligopoly is group of sellers, who work together and have some control over the prices of a commodity in which there are few independent providers. Negotiations are managed via contracts. Oligopoly is a market that controls a commodity and is dominated by a small number of firms that act on one behalf. How is price determined in each market structure in terms of maximizing profits? Competitive Market In the competitive market no business has more market power than another. The environmental conditions measure and determine the market structure. No specific company has more power than the next. In a competitive market structure substitutes are common so competition can be easily adhered....
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