Answer to Question #319865 in Microeconomics for tory

Question

1. Market structures are referred as the competitive environment in which the buyers and sellers of the product operate. A market consists of all the actual and potential buyers and sellers of a particular product. Discuss thoroughly oligopolistic and perfect competitive market structure and give examples of each form of the market structure.
2. Differentiate between product market and labour market (Use diagrams that explain the interactions in the markets).

Answer 1

Oligopolistic market structure

It is a market structure that consists of a small number of firms, who together have significant influence over a certain industry. The group as a whole holds a great deal of market power but one company within the group has enough muscle or power to undermine the others or steal market share. As a result, prices in this market are moderate because of the presence of a certain degree of competition.

Examples

Film and television production

Recorded music,

Wireless carriers

Airlines.

Perfect Competitive market structure

A perfectly competitive market has the following characteristics:

• There are many buyers and sellers in the market.
• Each company makes a similar product.
• Buyers and sellers have access to perfect information about price.
• There are no transaction costs.
• There are no barriers to entry into or exit from the market.

The labor market: In which the emphasis is on the relationship between employers and employees, as well as how wages are set by human resource management. It helps in determination of the demand and supply of labor and a given wage rate.

The product market: This market focuses on the relationship between firms and their customers, as well as how the marketing department sets prices.Helps in determination of demand and supply of commodities at a prevailing market price.