Maximizing Profits in a Market Structure

Maximizing Profits in a Market body structure Paper

Crystal Stevens
Axia College
Carl Wertman
XECO 212
July 8, 2012

The economy is very crucial in our chance(a) lives and one important thing we should consider studying, is the principles and roles of the food grocerys, to be specific, the matched markets, monopolies, and oligopolies.
The hawkish market is defined as a market with some(prenominal) buyers and rag byers trading identical products so that each and either seller and buyer is a price taker. (Principle of Economics pg.290 Mankiw) In a competitive each seller and buyer accepts a predetermined price for the particular good being presented. The follow of a product is determined by how much the buyers ar willing to pay and how much the sellers are willing to sell the product to consumers for. For example if you went to the hired gun station and realized they had increase the fluff prices by 20 cents, that particular station would hold in a large drop in sales of gas scarce you could go to a different store where the gas may be cheaper. Two major characteristics in a competitive market are that there are many buyers and sellers in the market and the goods offered by the various sellers are more often than not the same.



Because of the way the competitive market works, the actions of any the buyers or sellers offer have a negligible impact on the market price. In a competitive market total tax income is proportionate to the amount to the amount of product you have sold. This way that the market price is the same regardless of how much you sell, so if you happen to sell twice as much of a product as you normally would you have made unnecessary profit.
Another important market structure is a monopoly; a monopoly is a firm that is a sole seller of a good without any close substitutes. Unlike the example I used in the previous paragraph about competitive markets when a company has a monopoly, such as an galvanizing company they may raise their price for electricity but that does not mean you can go someplace...If you want to get a full essay, order it on our website: Orderessay



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