MT 445 Purdue University Global Perfectly Competitive and Monopoly Market Structures Discussion
Description
Topic: Perfectly Competitive and Monopoly Market Structures
A perfectly competitive market structure has key features. There are many buyers and sellers so neither side of the market has market power. The product provided to the market is identical across suppliers. There are no barriers to entry.
A monopoly is a firm that is the only seller of a good or service that does not have a close substitute. Monopolies have very strong barriers to entry.
Discussion Checklist:
- Compare and contrast a perfectly competitive and monopoly market structure in terms of barriers to/ease of entry, competition, number of firms, efficiency pricing, and profits maximization.
- How do these differences contribute to deadweight loss in a monopoly market?
- In your opinion, why would a monopoly decide on its own to increase production and lower prices to earn an acceptable profit rather than maximize profits?
Explanation & Answer:
150 words
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