The meaning of market structure and the factors determining it.

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Answer 1

Question

Chapter 8, Problem 1P

To determine

The meaning of market structure and the factors determining it.

Expert Solution & Answer

Explanation of Solution

The term market structure refers to a system in which all the firms and customers in the market deals with each other and engage in some economic activities. All the firms sell their products in the market on a particular price. The products can be homogenous or heterogeneous in nature. The consumers buy these goods from the sellers in the market.

The factors which determine the market structure of a particular industry are as follows:

(a) Number of firms in the industry- In some market, the number of firms can be very large and in some market it can be very limited or in some market there is only one firm operating in the market.

(b) Number of buyers in the industry- Just like the number of firms in the industry can vary; the number of buyers can also vary. In some markets the numbers of buyers are huge and in some markets the buyers are as low as only one buyer.

(c) Type of products- There can be different types of products in the market; they can be homogenous or heterogeneous in nature.

(d) Restrictions on the entry and exit of the firms- Some market structure allows free entry and exit of firms while other have no or limited entry and exit of firms.

(e) Level of competition- The different market structure has different degrees of competition. In some market structure, there is high degree of competition while other has low or zero level of competition.

Economics Concept Introduction

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a) Assume there are two firms, 1 and 2, competing as Cournot duopolists in a market, selling a homogeneous product. Demand is given by p = 36 – (q1 + q2), where p is price and q1 and q2 are the outputs of firms 1 and 2 respectively. Each firm faces a marginal cost of 6 per unit of output and no fixed cost. Find each firm’s optimal output, the price at which they sell, each firm’s profit , and consumer surplus. b) Now assume that the firms face the same costs, but horizontally differentiate their product, so that firm 1 faces demand p1 = 36 – (q1 + q2/2) and firm 2 faces demand p2 = 36 – (q1/2 + q2). Assume Cournot competition. Calculate the new equilibrium prices and outputs for each firm, consumer surplus and profits. c) Now assume that rather than facing a given degree of product differentiation, the firms can choosehowdifferentiatedtheirproductsare.Thisisequivalenttoinversedemandequationsp1 =36 –(q1 +θq2)andp2 =36–(θq1 +q2),0≤θ≤1,withθdeterminedbythefirms’choicesofproduct…

Assume there are two firms, 1 and 2, competing as Cournot duopolists in a market, selling a homogeneous product. Demand is given by p = 36 – (q1 + q2), where p is price and q1 and q2 are the outputs of firms 1 and 2 respectively. Each firm faces a marginal cost of 6 per unit of output and no fixed cost. Find each firm’s optimal output, the price at which they sell, each firm’s profit , and consumer surplus.

What is the relationship between the humanities and self identity

Answer 2

Question

Chapter 8, Problem 1P

To determine

The meaning of market structure and the factors determining it.

Expert Solution & Answer

Explanation of Solution

The term market structure refers to a system in which all the firms and customers in the market deals with each other and engage in some economic activities. All the firms sell their products in the market on a particular price. The products can be homogenous or heterogeneous in nature. The consumers buy these goods from the sellers in the market.

The factors which determine the market structure of a particular industry are as follows:

(a) Number of firms in the industry- In some market, the number of firms can be very large and in some market it can be very limited or in some market there is only one firm operating in the market.

(b) Number of buyers in the industry- Just like the number of firms in the industry can vary; the number of buyers can also vary. In some markets the numbers of buyers are huge and in some markets the buyers are as low as only one buyer.

(c) Type of products- There can be different types of products in the market; they can be homogenous or heterogeneous in nature.

(d) Restrictions on the entry and exit of the firms- Some market structure allows free entry and exit of firms while other have no or limited entry and exit of firms.

(e) Level of competition- The different market structure has different degrees of competition. In some market structure, there is high degree of competition while other has low or zero level of competition.

Economics Concept Introduction

Introduction: Not Required.

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Answer 3

Question

Chapter 8, Problem 1P

To determine

The meaning of market structure and the factors determining it.

Expert Solution & Answer

Explanation of Solution

The term market structure refers to a system in which all the firms and customers in the market deals with each other and engage in some economic activities. All the firms sell their products in the market on a particular price. The products can be homogenous or heterogeneous in nature. The consumers buy these goods from the sellers in the market.

The factors which determine the market structure of a particular industry are as follows:

(a) Number of firms in the industry- In some market, the number of firms can be very large and in some market it can be very limited or in some market there is only one firm operating in the market.

(b) Number of buyers in the industry- Just like the number of firms in the industry can vary; the number of buyers can also vary. In some markets the numbers of buyers are huge and in some markets the buyers are as low as only one buyer.

(c) Type of products- There can be different types of products in the market; they can be homogenous or heterogeneous in nature.

(d) Restrictions on the entry and exit of the firms- Some market structure allows free entry and exit of firms while other have no or limited entry and exit of firms.

(e) Level of competition- The different market structure has different degrees of competition. In some market structure, there is high degree of competition while other has low or zero level of competition.

Economics Concept Introduction

Introduction: Not Required.

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Answer 4

Question

Chapter 8, Problem 1P

To determine

The meaning of market structure and the factors determining it.

Expert Solution & Answer

Explanation of Solution

The term market structure refers to a system in which all the firms and customers in the market deals with each other and engage in some economic activities. All the firms sell their products in the market on a particular price. The products can be homogenous or heterogeneous in nature. The consumers buy these goods from the sellers in the market.

The factors which determine the market structure of a particular industry are as follows:

(a) Number of firms in the industry- In some market, the number of firms can be very large and in some market it can be very limited or in some market there is only one firm operating in the market.

(b) Number of buyers in the industry- Just like the number of firms in the industry can vary; the number of buyers can also vary. In some markets the numbers of buyers are huge and in some markets the buyers are as low as only one buyer.

(c) Type of products- There can be different types of products in the market; they can be homogenous or heterogeneous in nature.

(d) Restrictions on the entry and exit of the firms- Some market structure allows free entry and exit of firms while other have no or limited entry and exit of firms.

(e) Level of competition- The different market structure has different degrees of competition. In some market structure, there is high degree of competition while other has low or zero level of competition.

Economics Concept Introduction

Introduction: Not Required.

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Answer 5

Chapter 8, Problem 1P

To determine

The meaning of market structure and the factors determining it.

Expert Solution & Answer

Explanation of Solution

The term market structure refers to a system in which all the firms and customers in the market deals with each other and engage in some economic activities. All the firms sell their products in the market on a particular price. The products can be homogenous or heterogeneous in nature. The consumers buy these goods from the sellers in the market.

The factors which determine the market structure of a particular industry are as follows:

(a) Number of firms in the industry- In some market, the number of firms can be very large and in some market it can be very limited or in some market there is only one firm operating in the market.

(b) Number of buyers in the industry- Just like the number of firms in the industry can vary; the number of buyers can also vary. In some markets the numbers of buyers are huge and in some markets the buyers are as low as only one buyer.

(c) Type of products- There can be different types of products in the market; they can be homogenous or heterogeneous in nature.

(d) Restrictions on the entry and exit of the firms- Some market structure allows free entry and exit of firms while other have no or limited entry and exit of firms.

(e) Level of competition- The different market structure has different degrees of competition. In some market structure, there is high degree of competition while other has low or zero level of competition.

Economics Concept Introduction

Introduction: Not Required.

Answer 6

Chapter 8, Problem 1P

To determine

The meaning of market structure and the factors determining it.

Expert Solution & Answer

Explanation of Solution

The term market structure refers to a system in which all the firms and customers in the market deals with each other and engage in some economic activities. All the firms sell their products in the market on a particular price. The products can be homogenous or heterogeneous in nature. The consumers buy these goods from the sellers in the market.

The factors which determine the market structure of a particular industry are as follows:

(a) Number of firms in the industry- In some market, the number of firms can be very large and in some market it can be very limited or in some market there is only one firm operating in the market.

(b) Number of buyers in the industry- Just like the number of firms in the industry can vary; the number of buyers can also vary. In some markets the numbers of buyers are huge and in some markets the buyers are as low as only one buyer.

(c) Type of products- There can be different types of products in the market; they can be homogenous or heterogeneous in nature.

(d) Restrictions on the entry and exit of the firms- Some market structure allows free entry and exit of firms while other have no or limited entry and exit of firms.

(e) Level of competition- The different market structure has different degrees of competition. In some market structure, there is high degree of competition while other has low or zero level of competition.

Economics Concept Introduction

Introduction: Not Required.

Answer 7

Chapter 8, Problem 1P

To determine

The meaning of market structure and the factors determining it.

Answer 8

Expert Solution & Answer

Explanation of Solution

The term market structure refers to a system in which all the firms and customers in the market deals with each other and engage in some economic activities. All the firms sell their products in the market on a particular price. The products can be homogenous or heterogeneous in nature. The consumers buy these goods from the sellers in the market.

The factors which determine the market structure of a particular industry are as follows:

(a) Number of firms in the industry- In some market, the number of firms can be very large and in some market it can be very limited or in some market there is only one firm operating in the market.

(b) Number of buyers in the industry- Just like the number of firms in the industry can vary; the number of buyers can also vary. In some markets the numbers of buyers are huge and in some markets the buyers are as low as only one buyer.

(c) Type of products- There can be different types of products in the market; they can be homogenous or heterogeneous in nature.

(d) Restrictions on the entry and exit of the firms- Some market structure allows free entry and exit of firms while other have no or limited entry and exit of firms.

(e) Level of competition- The different market structure has different degrees of competition. In some market structure, there is high degree of competition while other has low or zero level of competition.