Market Structures Perfect Competition, Monopoly,...

Executive summary The main purpose of this report is to introduce four market structures – perfect competition, monopoly, monopolistic competition and oligopoly, and their determinations of price and output. It also discussed the possibility for firms to generate profits in the short-run and/or in the long-run within these four market structures. It will be shown in the discussion that both monopolistic and oligopolistic firms are able to generate profits in both short-run and long-run, while firms in perfect competition and monopolistic competition could only make profits in the short-run but not in the long-run. In the last section of the report, it provided a case of a Chinese monopolist in the railway service industry and talked about its pricing strategy when studying the monopolistic inelastic demand curve. 1. Introduction Identifying which type of market a firm is performing business in is important for a firm. Being in different types of the market will affect a firm’s ability to determine the price and thus generate profits. It also affects a firm’s ability to make profits in the long-run (Dietl 1998). In the case of China Railway Group Limited which will be discussed in this report, its monopolistic power helps it to regulate the prices of railway tickets as well as to achieve profits in the long-run. Hence, it is very vital and helpful for a firm to know which market it is in (Robert Cave 1999), in order to understand its power to set the monetary value. HavingShow MoreRelatedTypes of Competition1000 Words   |  4 Pagestypes of market structure: monopoly, oligopoly, monopolistic competition, and perfect competition. Although the list of market structures can be virtually unlimited, these four types are considered to be the basis for understanding the principles of market performa nce in different market conditions. Each of the four types of market structures possesses its benefits and drawbacks. In any of these markets, an entrepreneur can develop a strategy appropriate for conquering a part of the market niche. AlthoughRead MoreAn explanation of monopoly, oligopoly, perfect competition, and monopolistic competition - a detailed overview946 Words   |  4 PagesThe Australian market is a diverse economic ocean - it has different species of marine life (industries), different swells (market structure) and even hot and cold spots (public companies). One of the key determinates to a successful national economy is the structure of its markets. The main market structures are: 1. Monopoly 2. Oligopoly 3. Perfect Competition 4. Monopolistic Competition Each of these market structures have unique characteristics, and can be classified according to threeRead MoreDifferent Types Of Market Structures1413 Words   |  6 PagesMarket Structures A market is defined as an institution that brings together buyers (demanders) and sellers (suppliers) of a particular good or service. A Market structure is the relationship among the buyers and sellers of a market and how prices are determined through outside influences. There are four different types of market structures. Two on opposite extremes, and two comfortably in the middle. On one end is perfect competition, which acts as a starting point in price and output determinationRead MoreThe Types Of Market Structures1640 Words   |  7 PagesA market structure is where the physical characteristics of the market, where firms interact (). Market structures can highlight the criteria of firms, and express the barriers that they may face with entering. 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In turn, these theories will be analysed, compared and contrasted with real life examples. The market structure related to each business reflects the profit maximisation and productions of the firms. The demand curve will also vary depending on the market structure; MC=MR. Perfect competition is representative of a competitive market; customaryRead MoreThe Market Structures Of A Market Structure962 Words   |  4 Pagesfour market structures that function in the worldwide market. Each of these market structures correlates with one another to create the demand and supply of the market. However, these market structures have some unique traits that no other theory can have alike. Therefore, a comparison and contrast is necessary to distinguish each of these theories from one another. These market structures of the economy are perfect competition, monopoly, monopolistic competition, and oligopoly. These market structuresRead MoreEssay on Four Market Structures in Australia865 Words   |  4 PagesIndividual Essay Four Market Structures in Australia. NAME: LKHAGVASUREN KHURELBAATAR ID: EMV 20110 ------------------------------------------------- Individual Essay Four Market Structures in Australia. Introduction Market structure reflects all the most important aspects of the market - the number of firms in the industry, the type of product produced, the possibility to enter and exit of firms, number of customers, the ability of a single firm to influence the market price. The lowerRead MoreThe Competitive Strategy Of Titan1090 Words   |  5 Pagesone of four different market structures; perfect competition, monopoly, monopolistic competition, and oligopoly. The market structure an organization is grouped in is based on characteristics such as competition, products, and ease of entry into the market. Powerlifting is a specialized sport with only a few companies selling the custom equipment required. Titan is one of the companies that sell powerlifting equipment. The following paragraphs will identify which market structure Titan belongs to and