Question

Discuss the differences between the three market structures. As a manager, why is it important to understand the three market structures? and Include at least one solved problem.

Please provide three different market structures in your own words and there should not be any playgarism

Answer 1

Market	features	Example	Price setting
Perfect competition	Free entry and exit. -Homogenous products. -Firms and consumers are price takers. -No selling costs -Huge number of buyers and sellers. -zero economic profit	Market for Vegetables	Price=Marginal cost
Monopoly	-single firm. -no close substitute of goods. -restriction on entry. -Firm is price maker -price discrimination -Positive profits	Debeers	Marginal cost=Marginal revenue
Monopolistic	-product differentiation -huge selling costs -Free entry and exit -Some control over price -Positive profits in the short run and normal profits in the long run	-Firms in hair care industries like loréal.	MR=MC

Understanding of the market is important to figure how to set prices,who are the competitors and how many,how price can be influenced,what are the conditions of entry in the market,will the market be profitable for the particular product.