ECO 205 Week 5 Final Paper Market Structures
I’ve been hired as a consultant by the local mayor to look at the various market structures in our area, and my role is to givean analysis and provide answers to a few important questions that will help the mayor understand the structures of many of the businesses in his city: 1. What goods or services are being produced/offered; 2. How are these goods or services going to be produced/offered; and 3. Who (or what type of) consumers will be purchasing said goods or services? Market structures can affect a city’s economy. Therefore a proper evaluation of the local market structures should be completed so local officials can make decisions on which policies would be most effective for their communities. It will be my intention to help the mayor, and local officials, understand the demographics of our community by discussing the four different market structures, the barriers to entry in each market, price elasticity of demand in each market, how the government can intervene in these market structures, and how international trade can affect these market structures as well.
A perfect competition market structure is one in which there are many sellers and buyers, firms produce a homogenous product, and there is free entry into and exit out of the industry (Amacher & Pate, 2013, chap 9 summary).