Differentiating between Market Structures

The social structure of a commercialise is defined by the subject of firms in the trade, the existence or otherwise of barriers to entry of novel firms, and the interdependence among firms in determining pricing and come out of the closetput to increase profits. This paper will cover the advantages and limitation of supply and prerequisite identified in the simulation, the effectiveness of the organization, and how the organizations in each market structure maximizes profits.

The simulation looks at all 4 types of market structure within the East-West Transportation Company. There are four divisions that operate within each of the four market structures. The divisions are Consumer Goods, Coal, Chemical and Forest Products.

In the first scenario, the decision mustiness be made whether to continue operations or bar down operations. After completing the simulation, it pointed towards continuing with operations in a perfect competition market. In the scenario the market call for write out is downward sloping, each seller perceives the individual pick out curve facing him or her to be perfectly resilient at a given price. Given this scenario this bring curve and the cost structures, sellers try to produce and output signal at maximized profit.

The piece scenario has the company looking at the coal division, which operates in the monopoly structure. Tanya Roy pointed out that the law of demand holds in a monopoly.



At a high price, quantity demanded is high and profit would not need to be high. For a monopolist, price exceeds marginal revenue. Thus, at the output where Marginal Revenue = Marginal Cost, you extend the quantity bank bill to the demand curve to determine the price to charge for this output. The demand curve is facing in a downward pitch in the monopolist structure.

In the third scenario the market structure is oligopoly- duopoly in the Chemical Division. The industry marginal cost...

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