Competition, Monopoly, and Oligopoly & Monopolistic Competitive Market Term Paper

Competition, Monopoly, and Oligopoly & Monopolistic Competitive Market Structure - Term Paper ExampleThe research explained briefly on the perfect competitive commercialize structure and revealed some features of this market structure. It described the way firms maximize profits with the help of diagrams, the researcher revealed the way they maximize profit at the equilibrium call for in both short and long run. Lastly, the conclusion summed up the discussion, and the researcher provided some significant aras for further research study. The market is structured depending on alter factors and variation that determine the market structure of a particular firm in an economy. Competition is one of the factors or conditions that determines the structure of a firm. The economists assume that in that respect atomic number 18 many buyers and sellers in the marketplace hence, they compete favorably for the available products in the market. Therefore, competition in the market contribute s to changes of prices for commodities thus creating a shift in demand and supply curve. Furthermore, there are substitute products in the marketplace thus, when one product increases the prices, consumers chose the alternative of consuming substitute products. The buyers and sellers have the ability to govern prices for commodities, and this contributes to increased competition in the market. ... The buyers and sellers may exchange property rights and everyone in the market interacts voluntarily in order to achieve self-interest. The buyers and sellers interact thus, they signal overmuch information about the product through product prices. Successful sellers reduce prices in order to influence buyers and out-compete their competitor (Mankiw 2011, 36). The sellers can maximize profits in case the price exceeds the products costs. Monopoly A monopoly refers to a market structure whereby only a single producer or buyer for a commodity exists. The monopoly firms are the price makers because they are single sellers in the market. Monopoly is a single business firm and it is characterized by varied features including market restrictions because of high costs and production of homogenous products. The government has powers to control or restrict entries into the market by creating barriers. The barrier to market entry may result because the firm may have scoop rights of accessing the natural resources. For instance, the Kenya Power and Lighting Company is a monopolistic firm because the government takes control over the resources. The same case applies to Saudi Arabia oil perseverance because the Saudi government is the sole control of the natural oil reserves. The market also have a patent right that impede other competitors from get into into the market. The monopoly firm is classified into numerous features including perfect monopoly whereby the single seller does not have substitute products. Therefore, there is no perfect competition, but such firms are e xtremely rare. Another one is imperfect monopoly whereby the single seller does not have close substitute products meaning that the