Economics Assignment - Analyzing Market Structures and Efficiency

This economics assignment delves into various market structures, examining their impact on resource allocation and economic efficiency. The assignment begins by analyzing monopolies, illustrating how a single seller can lead to inefficient resource allocation through high prices and reduced output, resulting in deadweight loss. It then contrasts this with perfect competition, which serves as a benchmark for allocative efficiency, where goods are sold at a price equal to the marginal cost. The assignment also explores monopolistic competition, highlighting how firms in this structure fail to achieve allocative efficiency due to prices exceeding marginal costs and excess capacity. Furthermore, the analysis extends to oligopolies, specifically collusive oligopolies, demonstrating how collusion among firms can restrict output, inflate prices, and lead to inefficient allocation of factors of production. The assignment also discusses the consequences of cheating within a collusive agreement. Finally, the assignment concludes by comparing and contrasting the long-run supply curves for constant cost and increasing cost firms and industries, providing a comprehensive understanding of market dynamics and supply-side economics.