Question

In: Economics

What are the four different types of market structures? In two or more sentences provide at...

What are the four different types of market structures?

In two or more sentences provide at least 3 or more characteristics that separate a perfectly competitive market structure from a monopolistic market structure?

Which type of market structure has differentiated goods and services?

Identify at least one market structure that is predominant in the United States?

At what point do all four market structures maximize profits?

In one to two sentences explain, how a monopolistic market structure determines its optimal price and quantity?

Which type of market structure faces a perfectly elastic demand curve?

In two or more sentences, explain the difference between consumer surplus and producer surplus?

Given the graph below explain which triangle color represents consumer surplus and which triangle color represents

Solutions

Expert Solution

1. Perfect, Monopolistic, Oligopoly and Monopoly
2. Goods are identical in perfectly competitive whereas it is differentiated in a monopolistic market structure.
The market is transparent perfectly competitive whereas it is less in a monopolistic market structure
No market power for perfectly competitive whereas it is of small amount for a monopolistic market structure
3. Monopolistic market structure
4. It is Monopolistic market structure as it helps to differentiate them from other
5. Perfect competition at MC=MR
Monopolistic at MC=MR and at point where it touches demand curve
Oligopoly at MC=MR
Monopoly at MC=MR and at point where it touches demand curve
6. Monopolistic at MC=MR and because of small market power it increases the price at a point where it touches demand curve
7. As perfectly competitive market has perfect substitutes the demand curve is perfectly elastic
8. Consumer surplus = Highest Price a consumer is willing to pay – actual market price of the good
Producer Surplus = Market Price – Lowest price a producer would be willing to accept


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