Question

which of the four market structures would be most preferable to consumers? to organizations' owners? to governments? why?

Answer 1

Market structures provide a starting point for assessing economic environments in business. An understanding of how companies and markets work allows business professionals and leaders to accurately judge industry and market news, policy changes and legislation and how the economy shapes important decisions.

“Market structures” refer to the different market characteristics that determine relations between sellers to each another, of sellers to buyers and more. There are several basic defining characteristics of a market structure, such as the following:

• The commodity or item that’s sold and the extent of production differentiation.
• The ease or difficulty of entering and exiting the market.
• The distribution of market share for the largest firms.
• The number of companies in the market.
• The number of buyers and how they work with or against the sellers to dictate price and quantity.
• The relationship between sellers.

A Pure or perfect competition would be most preferable to consumers to organizations' and to government.

Pure or perfect competition is a market structure defined by a large number of small firms competing against each other. A single firm doesn’t have significant marketing power, and as a result, the industry produces an optimal level of output because firms don’t have the ability to influence market prices. Supply and demand determine the amount of goods and services produced, along with the market prices set by the companies in the market. Products are identical to competitors’ products, and there are no significant barriers to entering and exiting the market.

The pure competition market structure is rare in the real world. This is a theoretical model that is helpful when looking at industries with similar characteristics. In other words, it’s a good reference point for other market structures. The best examples of pure competition market structures are stock, agricultural and craft markets.