Each statement describes one of the major market models or industry structures (pure competition, pure monopoly,...

Each statement describes one of the major market models or industry structures (pure competition, pure monopoly, oligopoly, or monopolistic competition) . Provide the market model or industry structure each description best fits

1. Individual firm in this market model faces a perfectly elastic demand curve.

2. Industry model where excess capacity is most likely to be found.

3. Industry structure in which one firm produces a product for which there are no good substitutes.

4. The Vegas hotel casino industry would be found in the industry or market model.

5. A pharmaceutical company would be classified in this group:

6. Market structure in which a local pizza or sandwich shop would be classified.

7. The beer industry would be classified in this industry structure.

8. The airline industry is found in this industry or market structure.

9. Industry structure in which both productive and allocative efficiency is attained in the the long run.

10. Market structure marked by mutual interdependence among firms.

Expert Solution

Answer 1- An individual firm in a purely competitive market faces a perfectly elastic demand curve,because in purely competitive, firm has to be uniform i.e he charge the same price as every other firm in the market is charging.It is represented by a straight horizontal line.

Answer 2-Monopolistic competition as in this product differentiation is there as large number of close substitute of a product in the market is available,which leads to downward sloping of the demand curve and elasticity of a demand for the firms product ,tends to be high.

Answer 3- Monopoly market - where there is a single seller of a product with no close substitutes.For eg-Railways is the monopoly of the government.In Monopoly firm has a fuller control over price,hence he is the price-maker.

Answer 4- It is basically found in market model as it can be open market competition,sometimes it is found in the structures of oligopoly and sometimes in monopoly.As in monopoly enterprise it serves as a main market,where competition is not there.If we talk about oligopoly,few firms are there and large number of buyers price and output decision of one firm,significantly impacts the price and output decision of the rival firms in the market.

Good luck?

Rahul Sunny answered 1 year ago

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Each statement describes one of the major market models or industry structures (pure competition, pure monopoly,...

Solutions

Expert Solution

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