Market Stuctures

In: Business and Management

Submitted By mwood
Words 1239
Pages 5
Market Structures

ECO 204 Principles of Microeconomics
Instructor: Christine Villasenor
August 26th, 2013

Market Structures

Every business throughout the business world will run their company in one of the four business structures. I am going to show the different examples of the different market structures of perfect competition, pure monopoly, monopolistic competition and oligopoly.
Perfect competition is a big number of firms all making a familiar product that not one producer can affect the change in price. “If changes in nominal aggregate demand do not affect real output and employment, a financial crisis cannot be very important. However, the neutrality result does not really apply in the real world, either in the short or long runs.”(Ng, Y. 2009) An example of pure competition would be farms that produce common vegetables that we buy at the grocery store. There are so many farmers that produce fruits and vegetables that if one of them were to try to affect the market by lowering or raising prices, it would not really affect the prices of the rest of the market. But if a large portion of farmers where to work together about raising or lowering prices, we would see it affect the market more. “In reality, perfect competition is more theory than actual fact. While there are rare situations in which a marketplace functions with pure competition for a short period of time, the situation normally shifts as various factors change the stalemate created by a multiplicity of sellers and buyers. This is often due to the somewhat stringent set of factors that must be present in order for the competition to be considered perfect or pure. “( The problem with this type of market is that there is only a slight motive for competition, where the price will not have a substantial variance when consumers look at the different competition.…...

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