Question

Determine a different real life example for each of the market structures, and list the determinants to prove your choices.

Answer 1

a) Perfect market condition = Agricutural goods like rice, wheat or fruits, all these goods are homogeneous, all the buyers and sellers have all the information about the products, and there are a large number of buyers are sellers in the market who individually cannot influence it.

b) Monopolistically competitive market = Coffee shop, there are a large number of firms selling a slightly different good. they all have some control over the price and they are price searchers.

c) Monopoly= US railway, only one firm in the market selling a good that has no close substitute.

d) Oligopoly = Airline service, there are few sellers in the market selling the goods and they all are interdependent.