Economics Assignment Help: Exploring Market Structure
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Students pursuing economics are often asked to craft stellar and exceptional papers on market structure. In economics, the market structure refers to how various industries are classified and differentiated based on their degree and nature of the competition for services and goods. It is based on different characteristics that impact the outcomes of companies working in a particular market.
If you are one of those hundreds and thousands of students failing to turn in a brilliant paper on market structure, reading today’s comprehensive post will surely put you miles ahead. Below, we have broken down the concept of market structure and its crucial aspects that will enable you to sail through your papers like an academic champion.
Market Structures: A Brief Overview
A close look at reputed economics assignment help samples on reputed academic websites like MyAssignmentHelp.co.uk will help you understand that market structures refer to how different industries are categorized and differentiated according to their nature and degree of competition for services and products.
According to a study by Charles C. Fischer, the concept of market structure is central to both marketing and economics. Both disciplines are concerned with strategic decision-making. The characteristics and extent of competition in the market affect choice behavior among the actors.
The structure can be of four types – perfect competition, monopolistic markets, oligopolistic markets, monopolistic markets, and monopolistic competition.
Market Structures: What are the Types?
- Perfect Competition
According to McNulty (1968) and Broaddus (1991), market structure is crucial because it impacts market outcomes through its influence on the motivations, decisions, and opportunities of economic actors participating in the market. The economic market structure analysis aims to isolate these impacts to describe and predict market outcomes.
Perfect competition occurs when many small companies compete against each other. They sell similar or homogenous products, lack price impact over the commodities, and are free to exit or enter the market.
- Monopolistic Competition
In this kind of market, there are still a huge number of purchasers as well as sellers. However, all of them do not sell homogenous products. The products are also similar, but all sellers tend to sell somewhat differentiated products.
The monopolistic competitive markets have the below-enlisted characteristics –
- There are various producers and consumers in the market and business has complete control over the market’s price.
- Consumers perceive that there are non-price differences among the products of the competitors.
- There are only a couple of barriers to entry and exit.
- Producers have a degree of control over the price.
For instance, the market for cereals is a monopolistic competition. The products are all similar but slightly differentiated in taste and flavors.
- Oligopoly
An oligopoly market comprises a small number of large organizations that sell identical or differentiated products. As there are only a few players in the market, their competitive strategies are completely dependent on each other.
For instance, if one of the actors in the market decides to lessen the price of its products, this action will trigger other actors to reduce their prices. On the other hand, a price increase may cause others not to act in anticipation that consumers will choose their products. Hence, these players must plan strategically.
- Monopoly
In a monopoly market, a single organization represents the entire industry. It has no competitors and is the sole seller of products in the whole market. This kind of market is hugely characterized by crucial aspects like the sole claim to ownership of resources, copyrights, and patents, licenses authorized by the government, or exorbitant initial setup costs.
All the above characteristics associated with monopoly limit other organizations from entering the market. Hence, the company remains a single seller as it has the power to control the market and set prices for its goods.
Final Thoughts,
The accurate market sequence structure from most to least competitive is perfect competition, imperfect competition, oligopoly, and pure monopoly. The key criteria by which one can differentiate between various market structures are the size and number of consumers and producers in the market, the kinds of services and goods being traded, and the degree to which the information can flow freely.
Understand the aspects above and include this significant information to nail your papers like a pro. Break a leg!
