Assignment 1: DiscussionMarket Structures

Industries can be classified under different market structures and this classification strongly dictates decisions made by managers within the market. For example, in an industry classified under perfect competition, or in a perfectly competitive market, many competitors offer the same product and entry into the industry is easy. In this market, the pressure to maintain the same prices as the competitors is high, which characterizes this market.
On the other extreme, some industries are classified as monopolies and some fall under monopolistic competition. In a monopoly, there is only one provider of a product or a service, which has an inelastic demand. In this case, there is little incentive for the monopoly to be efficient or price competitive. In a monopolistically competitive market, there are many firms selling a product or service that is only slightly differentiated from one another, and in the long term, these firms start showing characteristics of a perfectly competitive market.

Tasks:
Find an article about an industry in the United States, such as the pharmaceutical industry. You can consult sources such as theWall Street Journal,Financial Times,Bloomberg Markets, theEconomist,US News and World Report, and other publications for your reference.
After reading the article, respond to the following:
Identify the market structure that best characterizes the industry described in the article.Explain the factors you considered when identifying the market structure for this industry.Analyze whether this industry will work better if it changes its market strategy and starts showing characteristics of another market structure.Critically analyze the advantages and disadvantages of the market structures that you studied in the readings.Submission Details:
BySaturday, November 3, 2016, post your responses to thisDiscussion Area. Support your assumptions with reputable source material.

market structures

Order Description

Review Chapters 11–13 in Essential Foundations of Economics.
View the media 3.4a Resource: Perfect Competition and 3.4b Resource: Different Market Structures.
Next, write a two- to three-page paper (600 words minimum) examining perfect competition in the value-menu fast-food restaurant business. Address the following questions in your paper:
What are the characteristics of perfect competition? Why does this type of fast-food restaurant tend to display characteristics of perfect competition?
Imagine you are running a firm with the characteristics of a perfectly competitive firm. Describe how your firm would maximize its short-run profits.
Why might firms in perfect competition choose to be open on Monday, typically the slowest day of the week, when their revenues do not seem to be sufficient to warrant doing so?
What are the long-run benefits of running a firm in perfect competition?
Under what conditions would your value-menu fast-food restaurant decide to be open on Mondays, and when would it decide not to be open on Mondays? When is losing money on Mondays still a good business decision?
Explain how your experience as a manager would change if the value-menu fast-food restaurant you were in charge of operated under a different market structure?monopolistic competition, oligopoly, and monopoly. For example, in each case, how would you decide what price to charge? What would your profits look like? Would consumers be better off in terms of welfare, when you compare a firm in monopolistic competition, oligopoly, and monopoly to one in perfect competition?
Two sources in addition to your textbook are required for this paper.

market structures

Order Description

Review Chapters 11–13 in Essential Foundations of Economics.
View the media 3.4a Resource: Perfect Competition and 3.4b Resource: Different Market Structures.
Next, write a two- to three-page paper (600 words minimum) examining perfect competition in the value-menu fast-food restaurant business. Address the following questions in your paper:
What are the characteristics of perfect competition? Why does this type of fast-food restaurant tend to display characteristics of perfect competition?
Imagine you are running a firm with the characteristics of a perfectly competitive firm. Describe how your firm would maximize its short-run profits.
Why might firms in perfect competition choose to be open on Monday, typically the slowest day of the week, when their revenues do not seem to be sufficient to warrant doing so?
What are the long-run benefits of running a firm in perfect competition?
Under what conditions would your value-menu fast-food restaurant decide to be open on Mondays, and when would it decide not to be open on Mondays? When is losing money on Mondays still a good business decision?
Explain how your experience as a manager would change if the value-menu fast-food restaurant you were in charge of operated under a different market structure?monopolistic competition, oligopoly, and monopoly. For example, in each case, how would you decide what price to charge? What would your profits look like? Would consumers be better off in terms of welfare, when you compare a firm in monopolistic competition, oligopoly, and monopoly to one in perfect competition?
Two sources in addition to your textbook are required for this paper.