ECO 212 Week 3 Team Assignment Differentiating Between Market Structures Paper

ECO 212 Week 3 Team Assignment Differentiating Between Market Structures Paper

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Differentiating Between Market Structures Paper 1 Differentiating Between Market Structures
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Differentiating Between Market Structures Paper 2 Introduction Does money make the world go around? Answering the questions of how and who makes the money move will tell us if money takes on this task. The market structures that define our economies around the world are perfect competition, monopoly, monopolistic competition, and oligopoly. Comparing and contrasting types of goods and resources and marketing structures gives us the foundation of how our markets work together. This paper will also define the labor market equilibrium and look at the labor supply and demand of a company named British Petroleum. Let’s take a look and see how these different factors work to spin our world. 1. Compare and contrast public goods, private goods, common resources, and natural monopolies 2. When comparing and contrasting public and private goods, common resources and natural monopolies it is necessary to determine the meanings of excludable and rival in consumption. Excludable means “that it is property of a good whereby a person can be prevented from using it.” (Mankiw 224) Rival in consumption means that property of a good whereby 9one person’s use diminished other people’s use.” (Mankiw, 224) In comparison, both public goods and common resources are goods that are not excludable There is no price attached to the use of these goods. These are goods that
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Differentiating Between Market Structures Paper 3 everyone benefits from. For example, any person at any time can use and have fun on Bureau of Land Management land such as four-wheeling. In contrast common resources are rival in consumption. By using some of the common good it prevents others from using it. For example, when a hunter kills a deer, that deer is no longer available to feed someone else’s family. In contrast Private goods are goods that are both excludable and rival in consumption. Private goods have to be paid for unlike public goods and common resources. Natural monopolies are similar to private goods because they are both excludable. However, a natural monopoly does not rival in consumption. Natural monopolies are a monopoly that arises because a single firm can supply a good or service to an entire market at a smaller cost than could two or more firms. An example of a natural monopoly is “a bridge used so infrequently that it is never congested. The bridge is excludable because a
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This note was uploaded on 07/30/2011 for the course ECON 212 taught by Professor Steave during the Spring '10 term at University of Phoenix.

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ECO 212 Week 3 Team Assignment Differentiating Between Market Structures Paper

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