Analysing Market Dynamics: Oligopoly, Monopoly & Perfect Competition

This report provides an analysis of oligopoly and monopoly, emphasizing their relevance in the modern economic landscape. It validates Mankiw’s 10 principles of economics by relating them to market structures like perfect and imperfect competition. The report summarizes key points from a video discussing these concepts, including examples from the screw market and telephone service providers, and differentiates between monopolistic and perfect competitors. Furthermore, it examines how oligopoly and monopolistic competition are influenced by market size and firm concentration, highlighting the importance of strategic decision-making for both businesses and consumers in controlling supply and demand.

Running head: ASSIGNMENT ON ECONOMICS
Assignment on Economics
Name of the Student
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Author Note

1ASSIGNMENT ON ECONOMICS
Executive Summary
The main purpose of the report is to evaluate the concept of oligopoly and monopoly and
explain why this concept is more relevant to the modern world. In the next section, the report
highlights Mankiw’s 10 principles and discussed how these principles are foundational to
these issues. Moreover, the report has also highlighted the other two articles and analysed it .
Based on the above analysis, the report draws a clear understanding of monopoly and perfect
competition as discussed in the video and the articles.

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Contents
Introduction................................................................................................................................3
Importance of the topic..........................................................................................................3
Summary of the key points provided in the video.....................................................................3
Validation of Mankiw’s 10 principles........................................................................................3
The other related articles............................................................................................................4
Reference....................................................................................................................................5

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Introduction
Importance of the topic
Monopoly and Oligopoly are the two types of imperfect competition. In monopoly, a
single firm produces goods where there are no direct substitutes. On the contrary, oligopoly
market constitutes few firms who produces related goods at a slightly different prices. The
demographic size of the market help in the determinantion of oligopoly or monopoly in the
market (Merhav, 2017). This video discusses the idea of monopoly and oligopoly. It also
analyses the monopoly power of the screw market. Moreover, it highlights the difference
between perfect and imperfect competitive market structure. An important feature of perfect
competition is the free entry and exit where monopoly market assumes the barrier to entry
exists in the forms of patent and licenses (Merhav, 2017). Another feature in a perfectly
competitive firm is that the firms are considered to be price taker as they have a little share in
the market whereas monopolist has market power and charges higher prices for their
product in the market..
Summary of the key points provided in the video
The video has highlighted the general concept of perfect and imperfect competition
and identify the key differences. In the next section, the video highlighted those concepts
with two examples with the screw market industry assuming that it has the monopoly power
in the market and the second is telephone service provider in the locality. The video
elaborated the concept of oligopoly and monopolistic competition and finally provides a
giveaway between a monopolistic competitor and perfect competitor in that they have some
brand differentiation and quality differentiation between their products (Mankiw, 2014).

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Validation of Mankiw’s 10 principles
In comparison to Mankiw’s 10 principles, the video has discussed the basic idea of
perfect and imperfect competition. It has also given a brief idea of monopsony which is
considered as a foundation to Mankiw’s principle. Moreover, the article has also analysed
the key structure and differences between perfect competrition and monopoly. It has also
discussed how monopsonistic market emerges from oligopoly and monopolistic market
structure (Mankiw, 2014).
The other related articles
The other two articles discuss about the oligopoly, monopolistic and monopolistic
market structure and their differences. The concept of marketing strategy is defined as
marketing plan by the marketers. On the other hand, economists view the market structure
with an objective of interpreting and anticipating consumer behaviour (Ciliberto, Murry &
Tamer, 2016). Oligopoly and monopolistic competition are associated with the size of the
market. Moreover, the market control of each firm depends on the number of competitors in
the market. On the other hand, according to several economists, the market structure is
organized and this depends on the number of firms in the industry. Oligopoly consists of
fewer firms that are relatively large in size. There is higher levels of concentration of the
firms in the market. Moreover, the firms in the oligopoly market do not have competition
among them. It is necessary to consider the reaction of its close competitors before
implementing any business decisions. Therefore, from the above analysis, it can be said that
each market structure represents the specific attribute and thus has a tendency to show the
disparity over time. It is vital to analyse the market structure and this is considered important
for the business. It is also important for the consumers to take the strategic decisions
effectively. The firms must control the supply of their respective products or services to raise

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the demand and thus control what the consumers will be willing to pay for the product
(Saeedi et al., 2017).
Reference
Ciliberto, F., Murry, C., & Tamer, E. T. (2016). Market structure and competition in airline
markets.
Mankiw, N. G. (2014). Principles of macroeconomics. Cengage Learning.
Merhav, M. (2017). Technological dependence, monopoly, and growth. Elsevier.
Saeedi, H., Wiegmans, B., Behdani, B., & Zuidwijk, R. (2017). European intermodal
freight transport network: Market structure analysis. Journal of Transport
Geography, 60,141-154.