Question

ANSWER C PLEASE A. Graph and discuss a comparison of the short-run and long-run profits, price, quantity, MR and MC of a Monopoly and a PC firm. Which type of firm is more efficient and why? (30 points) B. Graph the short-run and long-run equilibrium of a Monopolistically Competitive firm. Are they efficient? Why or why not? (10 points) C. What is the market structure? Give an example and the characteristics of each type of structure. ANSWER C PLEASE

Answer 1

A market is a place where buyers and sellers meet to have transactions but in economics, we discuss the market based on the role of demand and supply attributing each other in order to have economic transactions with the help of money and exchange of goods.

Market structure when analyzed from an economic perspective the significance can be better understood because it is usually based on the number of buyers and sellers operating each other and having transactions.

Market structure has certain features like-

• The number of firms or buyers or sellers exist.
• Type of goods produced
• How much economic it can be
• The pricing strategy adopted by the firm
• Based on the duration

In Economics market structure can be classified based on the competition-

• Perfect competition
• Monopoly
• Duopoly
• Oligopoly
• Monopolistic competition

1)Perfect competition

Perfect competition is a market structure where there are a large number of buyers and sellers transacting homogeneous goods

Features

• There will be direct competition between buyers and sellers
• A large number of buyers and sellers
• Demand is perfectly elastic
• Pure and perfect competition in price.

2) Monopoly

A monopoly is an extreme market situation where there is only one seller in market condition.

Features

• Single seller
• No Competition
• The seller has absolute control over price and market
• Demand is inelastic
• Low price or product competition

3) Duopoly

A duopoly is a market condition where there are two buyers and sellers competing with each other in a market situation.

Features

• Two sellers in the market
• There will be a cut-throat competition and sometimes they can collude each other
• There will not be any product differentiation
• It seller will be fully aware of their arrival section

4)Oligopoly

In an oligopoly market structure, there are few sellers competing each other

Features

• Few sellers in a market
• If firms produce homogeneous product it becomes a pure oligopoly
• If sellers with product differentiation it constitutes impure oligopoly
• Each form enjoy the largest share of the market
• It is a significant influence on the price and output decisions

5) Monopolistic competition

Monopolistic market condition is nothing but imperfect market where there are large number of buyers and sellers

Features

• Large number of buyers and sellers
• There will be free entry and exit of
• There will be product differentiation where buyers can differentiate product and price from others
• Selling cost is influenced by advertisement
• More elastic demand