Respuesta :
Answer:
Explanation:
Pure monopoly: one firm; unique product: with no close substitutes; much control over price:
price maker; entry is blocked; mostly public relations advertising.
Monopolistic competition: many firms; differentiated products; some control over price in a
narrow range; relatively easy entry; much nonprice competition: advertising, trademarks, brand
names.
Oligopoly: few firms; standardized or differentiated products; control over price circumscribed by
mutual interdependence: much collusion; many obstacles to entry; much nonprice competition,
particularly product differentiation.
(a) Hometown supermarket: oligopoly. Supermarkets are few in number in any one area; their
size makes new entry very difficult; there is much nonprice competition. However, there is
much price competition as they compete for market share, and there seems to be no collusion.
In this regard, the supermarket acts more like a monopolistic competitor. Note that this
answer may vary by area. Some areas could be characterized by monopolistic competition
while isolated small towns may have a monopoly situation.
(b) Steel industry: oligopoly within the domestic production market. Firms are few in number;
their products are standardized to some extent; their size makes new entry very difficult; there
is much nonprice competition; there is little, if any, price competition; while there may be no
collusion, there does seem to be much price leadership.
(c) Kansas wheat farm: pure competition. There are a great number of similar farms; the product
is standardized; there is no control over price; there is no nonprice competition. However,
entry is difficult because of the cost of acquiring land from a present proprietor. Of course,
government programs to assist agriculture complicate the purity of this example.
(d) Commercial bank: monopolistic competition. There are many similar banks; the services are
differentiated as much as the bank can make them appear to be; there is control over price
(mostly interest charged or offered) within a narrow range; entry is relatively easy (maybe too
easy!); there is much advertising. Once again, not every bank may fit this modelâsmaller
towns may have an oligopoly or monopoly situation.
(e) Automobile industry: oligopoly. There are the Big Three automakers, so they are few in
number; their products are differentiated; their size makes new entry very difficult; there is
much nonprice competition; there is little true price competition; while there does not appear
to be any collusion, there has been much price leadership. However, imports have made the
industry more competitive in the past two decades, which has substantially reduced the
market power of the U.S. automakers.
Pure competition,pure monopoly,monopolistic competition and oligopoly are the main types of market structure.
Market structure in economics can be defined as the characteristics of the markets either competitive or organisational that described the pricing policy and competition followed in the market.
Pure competition;
pure competition can also be called a perfect competition.It is a market situation in which no one seller is capable of influencing price,all suppliers being price takers.Prices are fixed soleely by the forces of demand and supply.
Characteristics of pure competition;
- many buyers and sellers
- homogenous goods
- free entry and exit
- adequate information, etc.
pure monopoly;
In monopoly,there is only one producer or supplier of a particular commodity and has the power to influence the price to his/her own advantage.
Characteristics of monopoly;
- a single producer
- reduction in supply
- patent law,etc.
Monopolistic competition;
Also known as imperfect competition,here, there is competition among large number of firms whose products are close but not perfect substitutes.
Characteristics of monopolistic competition;
- it has different producers that produces close products
- competition
Oligopoly;
Here, the supply of acommodity is totally or substantially concentrated in the hand of some few firms,none of which is powerful enough to individually influence the market and price.
Characteristics of oligopoly;
- the action of one firm,especially on price,greatly influence the action of the others.
- presence of dominat firm(s)
a) A supermarket in your hometown is an example of oligopoly.
this may vary by area though.they fewer in some areas and the sizes makes entry difficult.
b)The steel industry;Oligopoly. Firms are fewer in number,there is little price competition if any.There seem to be much price leadership in the industry.
c)Kanakas wheat farm;Pure competition.There is a great number of similar farm available,and it is perfect competition.
d)Commercial bank in which you or your family has an account;Monopolistic competition.Not all banks can fit into this.The services are differentiated as much as the bank can make them appear to be,there is also price control.
a)Automobile industry;Oligopoly.There is very few automakers,their products are differentiated,there is much nonprice competition.
The equality of marginal revenue and marginal cost (mr =mc) is essential in profit maximization in all structures because it is possible to add more to revenue than to cost by increasing production.
After mr=mc,mc>mr.This means that increasing production would add more to cost than revenue,resulting to fall in profit.therefore profits are maximise where mr=mc.
Price can be substituted for mr in the mr=mc rule when an industry is purely competitive because in purely competition,the demand curve is perfectly elastic,price is constant regardless quantity demanded,thus MR=P price can be substituted for MR in the MR=MC rule.
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