Learning Team Deliverable Essay

This week we learned that industries consist of all firms do similar or identical products. Their merchandise grammatical construction depends on the hail of firms in the industry and the ways in which they compete. Our text discussed four underlie market mental synthesiss. The first market structure is perfect challenger. Perfect rivalry occurs when numerous small firms are in competition with each other. Businesses in a competitive industry produce the socially optimal end product level at the absolute minimal possible cost per unit. another(prenominal) type of market structure is known as a monopoly. This is an docile enough concept to comprehend, but I went back and forth with a a few(prenominal) classmates as to different interpreters of a monopoly. Technically, a monopoly is a parentage that basically has no competitors in its industry. They reduce takings to drive up prices and make up meshing. In doing so, they produce less than the socially optimal output le vel and produces at higher(prenominal) cost than competitive businesses.One usage of a monopoly would be the existence of only one option in utilities in any particular region. The third type of market structure is known as an oligopoly. This is a type of industry that has very few firms, and if they collude they can reduce output and drive up lucre much like a monopoly does. This doesnt always work though because a lot of times businesses will not honor their accordance with their competing industries. This will make the firms end up competing against each other for consumers business. An example of this type of structure would be the airline industry. This type of situation a lot benefits consumers. The fourth type of market structure is a monopolistic competition. In this type of structure industries have slightly different products, but so far compete against one another.One example of this would be restaurants, and how they all march food, but different types and at diffe rent prices in different locations. Consumers excessively benefit from the varieties in this type of marketstructure. How do markets evaluate the dominance of competitive strategies in their structures? For example they do so by evaluating their products, and differentiating their products to stick out in the long run. The main way to evaluate the effectiveness is to school the bottom line. The goal of every business is to make money, so an increase in profits will let you know your strategies are effective. avail maximization is a subject that I personally found a bit intimidating. Profit maximization is the process of obtaining the highest possible level of profit through the production and sale of goods and services.This assumption is the guiding principle underlying production by a firm. In a perfect competition structure, it can be tough to maximize profits. A monopoly has free upchuck to do as they will and therefore it is easier to maximize profits. In an oligopoly mark et very forms of collusion can reduce competition and lead to higher cost for consumers and higher profits for themselves. Strategic planning by oligopolists must take into account the likely responses of the other firms in their market. In a monopolistic structure the firm maximizes its profits by equating peripheral cost with marginal tax income.The intersection of the marginal cost and marginal revenue curves determines the firm equilibrium. The behavior of a monopolistic structure and a monopoly structure appear to be quite similar, especially in the short run. In summary, week 3 was a week packed with interesting conversations started by discussion questions. We are still in a bit of a haze when it comes to economic in general, but are clinging on to take to that we have enough of an understanding to be successful. Research and studying is the key, making yourself more familiar with the terms and their meanings.