Scholarly Activity The Key Characteristics Of Perfect Competition
Unit III ScholarlyActivity
Review and answer the following questions.
1. Identify the key characteristics of perfect competition, monopoly, and oligopolistically competitive markets, discriminating between the three types of market structures.
2. How do producers in each market maximize profit?
3. Examining the nuances of perfect competition, monopoly, and monopolistic competition, explain the implications of market efficiency, market power, and market entry in each?
Your response must be a minimum of two pages and have graduate-level theoretical content . All sources used must be referenced. Paraphrased and/or quoted
materials must have accompanying in-text citations and references in APA format.
Information about accessing the grading rubric for this assignment is provided below.
Scholarly Activities
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1. Identify the key characteristics of perfect competition, monopoly, and oligopolistically competitive markets, discriminating between the three types of market structures.
Several market structures help identify and characterize economies, such as perfect competition, monopoly, and oligopoly. All these market structures illustrate varying aspects of competition among the firms and highlight their decision-making processes. For instance, perfect competition describes how well-structured a market is, where most of the companies are fighting for their dominance. In this situation, a single company may not get any benefit until or unless it does not fully penetrate into the competitive market. As a result, the industry as a whole reaches an optimal level, and the quality of products and services significantly improves. At the same time, their prices are decreased to an extent. The best example of a perfect competition market is the stock market where the world’s companies and investors exchange their stocks and hope for better outcomes (Davis & Serrano, 2017).
On the other hand, monopoly refers to the market structure in which a single company influences the whole market. Multinational brands like Google and Facebook are controlling their relevant markets, and it looks like no other company would be able to defeat them in the near future. As a result, the monopolists generate lots of profits, set their own prices, and keep their barriers to enter the market high. In contrast, the oligopoly is a market structure where several companies dominate the entire system. For example, in the United States, several fast food chains like McDonald's, Pizza Hut, Whataburger and In-N-Out Burger have established a large number of restaurants, and there is less competition among them. These firms offer the same kinds of products and use their collaborative market power to increase prices anytime. Thus, the money gets restricted to only a few brands...