Market Structures and Government Intervention

Market Structures and Government Intervention Market structures ar the characteristics of a trade which determine levels behavior. These aspects include the number and size of the incorruptibles, the constitution of the return sold and the ease or difficulty of naked as a jaybird firms into a particular industry or commercialise. Economists differentiate these mart structures victimization the aforementioned facets as well as properties much(prenominal) as the number of firms which might enter the trade, the extent to which goods in the tradeplace atomic number 18 similar and the extent to which the actions of one firm entrust affect an other(a) firm. Using these characteristics, four major market structures can be classified in the Australian economy. These structures argon: thoroughgoing(a) competition, monopolistic competition, oligopoly and monopoly. Within these four market structures, governing encumbrance is needed for various reasons. Perfect competitio n is a market structure that has a large number of buyers and sellers who keep petty(a) to no influence over expenditures or output. early(a) features of a suddenly competitive market are; that in that respect is license of entry and exit from the market, meaning that firms are adapted to erect themselves in the industry easily and quickly and that there are no barriers to entry.

Also, all firms produce a solid product, with comminuted to no branding, where products are consummate(a) substitutes for each other in the market such as milk. In addition, there is perfect mobility, so buyers do not incur wha tsoever monetary value for moving from one s! eller to another. Lastly, buyers and sellers possess perfect intimacy of the equipment casualtys and the output, therefore if one seller charges a high price than the market price, buyers will move elsewhere. Hence the firm has to lease the market price if it wishes to sell its products in the market. The market price becomes the firms demand curve and this would be suddenly elastic since perfect substitutes exist. Since the market price is unconquerable by the market itself, perfectly competitive...If you want to get a wide essay, order it on our website: BestEssayCheap.com

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