Week Several Assignment: Industry Structures and Maximizing Profits Shayne Paul Jedlicka
March 30, 2011
Week 4 Assignment: Marketplace Structures and Maximizing Income
Three market structures concerning monopolies, oligopolies, and competitive markets make up the economy in the United States. Each industry has diverse characteristics making each a crucial part of the economic system. Maximum revenue are received in a monopoly market for its control over the marketplace, an oligopoly market even offers a large amount of control but profits are decreased because several competition is present, and a competitive marketplace realizes the smallest amount of profit likelihood of any company even though it is the greatest market framework. Each industry has its own approach to determining just how much of a services or products to produce, the amount of money the product or service will be worth, and the amount of difficulty for another company to enter that particular marketplace structure. Monopoly Market
A monopoly can be when a single company offers control over one needed to make a product or service due to ownership in the resource, the federal government giving one company the rights into a resource, or maybe the demand for the product or assistance is certainly not large enough to aid more than one company (Mankiw, 2007). To maximize the profit in a monopoly the corporation sets the price above the marginal cost of creation while only producing enough of the product to meet the demand (AmosWEB LLC, 2011). In the event the company models the price to high the necessity for its item will decrease causing a negative profit, to avoid this, companies set the cost low enough to keep the demand high whilst still prices the product or service over a marginal cost of production. Many monopolies can be found because the with regard to the product is definitely not large enough to support two or more companies, 1 company owns the privileges to a product such as Microsoft's Windows applications (Mankiw, 2007), or the govt controls or perhaps assigns one to a...
Referrals: AmosWEB LLC. (2011, October). Competitive Market. Retrieved coming from http://www.AmosWEB.com
AmosWEB LLC. (2011, October). Monoploly. Retrieved from http://www.AmosWEB.com
AmosWEB LLC. (2011, October). Oligopoly. Retrieved coming from http://www.AmosWEB.com
Mankiw, N. G. (2007). Guidelines of Economics (4th education. ). Builder, OH: South-Western Cengage Learning.