Economics Assignment: Market Structures, Non-Price Competition, Mutual Dependence, Kinked Demand Curve

Running head: ECONOMICS ASSIGNMENT
Economics Assignment
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ECONOMICS ASSIGNMENT1
Table of Contents
Answer to Question: 1.....................................................................................................................2
Answer to Question: 2.....................................................................................................................2
Answer to Question: 3(a).................................................................................................................3
Answer to Question: 3(b).................................................................................................................4
Answer to Question: 4.....................................................................................................................5
Answer to Question: 5.....................................................................................................................5
Reference List..................................................................................................................................7

ECONOMICS ASSIGNMENT2
Answer to Question: 1
The comparison between the market structures such as monopoly, oligopoly, perfect
competition and monopolistic market is given below.
Features Perfect
Competition Monopoly Monopolistic
Competition
Oligopoly
Market
No. of firms
Infinite number
of firms with
infinite buyers.
Single firm
with
infinite
sellers
Few firms with
infinite number of
buyers
Two firms
with infinite
buyers
Similarity of
the
products
sold
Homogenous
products. Both
buyers and
sellers takes
the price as
given and no
one can
influence the
market power.
Specialized
. Firms are
price
takers and
have the
full control
on the
market
power
Differentiated. Few
firms have a small
power to influence
the market.
Homogenous
or
differentiated
. Two firms
have share
on the
market power
Barriers to
entry Free entry and
exit. No barriers
Entry
barriers-
legal,
technologi
cal.
No entry barriers
Controlled
entry and exit
of firms
Table 1: Difference between market structures
Source: (Zeuthen, 2018)
Answer to Question: 2
Based on the understanding of market structure answered in question1, a short description is
given on the markets followed by each business.
i. Aldi Supermarket in your city- In a supermarket, different stores are found who sell
similar products and customers have complete information about the product. So, the
market structure is Perfect Competition (Scitovsky, 2013).