Market Structures & Maximizing Pro

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Submitted By KillaNstinx
Words 769
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Market Structures & Amp Maximizing Pro

XECO/212

Momoh Dudu

10/12/2011

What is a the number of companies rivaling in a certain market, how they differ and how they are similar, and the task they venture when entering and exiting the market determines that companies market structure. What roles does each market structure play in the economy. Many assumptions are made about the different types of markets, including competitive markets, monopolies, and oligopolies. This paper will break the wrong assumptions that there is competition in every market. It will also help to understand the following four questions. What the characteristics of each market structure consists of? How is price determined in each market structure in terms of maximizing profits? How is output determined in each market structure in terms of maximizing profits? What are the barriers to entry, if any? Competitive Markets also know as perfectly competitive market maintains two basic characteristics. The characteristics consists of having many buyers and sellers in the market and the goods and services brought forth but multiple consumers. These characteristics play a large part in devising the market price. These buyers and sellers take the market price as it is given to them. Competitive market has open doors allowing companies to enter and exit at will. Price determination is competitive markets in terms of maximizing profits are worked as total revenue minus total cost. Competition with buyers build on the market price to demand prices as with competition with in the sellers will cause the market price to lower for supply pricing. This market thrives on the fact that competition will keep this market flowing. Just like competitive markets, monopolies also shrink the cost of product to maximize their profits. Monopolies are markets consisting of one firm selling that specific…...

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