Maximizing Profits in Market Structures Paper

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Running head: MAXIMIZING PROFITS IN MARKET STRUCTURES PAPER 1 Maximizing Profits in Market Structures Paper Darrell Dannelley XECO/212 October 2, 2011 Troy Mahone
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MAXIMIZING PROFITS IN MARKET STRUCTURES PAPER 2 Maximizing Profits in Market Structures Paper There are different types of market structures. A competitive market or a perfectly competitive market is made up of two features. The first feature is the fact there is multiple buyers and sellers in the market. The goods that are available are from many sellers but they are largely the same. The firms are able to enter and exit the market at will. In a competitive market the price is controlled by that market. This structure of market allows buyers to buy the same or similar good from many sellers. A monopoly is a different type of market structure. A monopoly is when there is only one firm that sells a good. The good is unlike any other good so there is no substitute for it. If the good is wanted then the buyer is forced to go to the one firm and get it from them. The firm remains to have a monopoly because the key resource is owned by the single firm. The government will give the firm the sole rights to produce the good or pervade the service making it a monopoly. The cost of production makes a single producer more efficient then multiple producers. The price is controlled my by the demand of the good as a result of there is no substitute of the good so they are forced to pay the asking price or do without. A third type of market structure is oligopolies. An oligopoly is when there are a few large
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