Question

We are learning quite a bit about market structures in this module week's summit session. Hopefully, you have had the opportunity to discuss market structures with your colleagues leading up to this activity. Now, let's dig a little deeper into market structures. In this activity, you will draft a document addressing the following topics:

1. Identify the differences between all four market structures in the short-run and long-run. This will be helpful as many of you may hold management positions and/or become entrepreneurs in the near future. When deciding what type of firm to own or operate, you may find that one market structure may be more advantageous over another based on short-run and long-run costs.  
2. Explain the significance that the average total cost (ATC) curve has on profit and loss based on each type of market structure. Explore how the ATC curve affects all four market structures and identify whether firms will earn a profit or loss based on the placement of the ATC curve and price.

Your answers must be supported by a minimum of two sources

Answer 1

Answer :-

Identify the differences between all four market structures in the short-run and long-run. This will be helpful as many of you may hold management positions and/or become entrepreneurs in the near future. When deciding what type of firm to own or operate, you may find that one market structure may be more advantageous over another based on short-run and long-run costs?

i) :- There are tremendous contrasts between the four market structures :-

While monopoly is one extraordinary with a solitary seller and huge number of buyers, the perfect competition is another outrageous with huge number of buyers and sellers. Oligopoly and monopolisitc competition are among these two boundaries of monopoly and perfect competition. With respect to short run profit making, all the organizations in all the market structures can make excessively typical profits while no one but monopolist can make too ordinary profits additionally over the long haul. In the perfect competition, there are huge number of buyers and sellers and they produce homogeneous products which are of a similar quality and type and henceforth these producers have no influence over the cost as the consumers can shift to other comparative products of competitiors.

Anyway in the monopolistic competition, however the producers produce comparable products, there is some measure of separation in them which makes the consumers faithful to explicit brands of products.

Explain the significance that the average total cost (ATC) curve has on profit and loss based on each type of market structure. Explore how the ATC curve affects all four market structures and identify whether firms will earn a profit or loss based on the placement of the ATC curve and price.

ii) :- As a general rule, there are numerous industries which are pervasive in oligopoly and monopolistic competition market structures than there are industries in different sorts of market structures. In particular, in monopoly and oligopoly market structures, the investment required to begin a firm is overwhelming and subsequently there are noteworthy obstructions to passage in these industries. Instances of different makret strucutures remember power and utilities for monopoly, vehicles in oligopoly, purchaser goods like cleansers, and tooth glues in monopolistic competition and agricultural goods in perfect competition.

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