Eco 561 Ltb Week 4 Reflection

LTB Reflection Paper Week 4

Any industry can be in one of the four market structures for a long time. However, if a product is successful and attracts a lot of competition, the structure can change rapidly. When a new monopoly develops a product, it is easy to make a profit more so when the product is useful. Nevertheless, supply and demand is the hardest part to balance. If consumers want or need the product, and are willing to pay the new price on the new product, the price can easily be raised yet keeping the prices at a market level. To help increase profit, the production process must be streamline and bargain the cost down.

In a monopolistic competitive market structure, businesses have numerous competitors each offering a product with slightly different features by packaging its products distinctively and setting it apart from its competitor’s products in the same market. In this market, businesses makes independent decisions about price and output.

Grocery stores and gas stations can be basic examples of monopolistic competition. Monopolistic competition differentiates their products by design, color, shape and performance. They also differentiate their product by their distinctive packaging; the level of employee training, their uniforms and distribution via internet shopping.

For example in restaurants, customer can review all the menus available from restaurants in a town, once they enter the restaurant; they review their menu again before ordering but they still cannot form an opinion on the meal until they have dined.

Pure competition is a market structure in which a great deal of businesses sell a similar product into which the individual seller has no control over the product price and in which there is no nonprice competition and is characterized by a vast number of buyers and sellers. Examples of pure competition products are cultivated crop. Pure competition is also the process by which independent vendors are each marketing the same...