Company under Different Market Structures Assignment

Company under Different Market Structures - Assignment ExampleThere ar no barriers to entry for other soakeds to enter into the market. In the short run, the firms can alter only the variable quantity factor namely labor. The other decisions ar predetermined (Krlkov, n.d., p. 3). In the long run, the firms have the potential to change their scale. In the short run when the existing expenditure is less than the average hail abbreviate it is check for the firm to close down.In a situation of monopoly single firm exists in the market. The firm sells a unique product and there are no close substitutes. The firm has the power to set the price i.e. the firm is the price maker. Barriers to entry exist in the market of monopoly. There are many buyers and sellers in the monopolistically competitive market. The products of the market can be differentiated.Monopolistic competition along with oligopoly constitutes the structure of imperfect competition. Firms that are imperfectly compet itive offer many products. The products are offered at administered prices. The price changes are costly and slow. The primitive prediction of the theory of monopolistic competition is that firms will produce at the level where marginal cost equals marginal tax income in the short run. However, in the long run, the firms will operate at zip profit levels and the demand curve will be tangential to the average total cost curve (Solow, 1999, p. 9).A form of market where the industry is dominated by a small number of sellers is called oligopoly. separately oligopolist is aware of the market conditions as few sellers are present in the market. The decision of one firm can influence or are influenced by other firms. The responses of the participants of the market are taken into figure in the strategic planning process by the oligopolists (Friedman, 1983, p. 6). Competition in the oligopolistic market can take hold rise to different outcomes. An oligopoly can maximize its profits by producing at the level where marginal revenue equals marginal costs.