Economics: Market Structures, Pricing, and Resource Scarcity Report

This report provides an overview of various market structures in economics, including perfect competition, monopoly, and oligopoly, and how they influence price determination. It explains the characteristics of each market structure, such as the number of sellers, product differentiation, and ease of entry and exit. The report also analyzes the influence of price on scarce resources, emphasizing that scarce goods command higher prices due to their limited availability and high demand. The author references key economics texts to support the analysis, providing a comprehensive understanding of the subject. This report is a valuable resource for students studying economics, offering insights into fundamental concepts and real-world applications.

Running head: ECONOMICS
Economics
Name of the student
Name of the university
Author note

ECONOMICS
Various market structures
There are very few different market structures which are known to characterize the
economy where all types of market structure do not exist in reality. These are basically four
different type of market structures in the economy which are the perfect competition,
monopoly, oligopoly and imperfect competition.
Characteristics of the four different market structures are:
Perfect competition: the firm under perfect competition is known as the price taker since
they have no control over the price. Each firm in this type of market structure is so small that
it does not affect the decisions of other firms (Bade & Parkin, 2015). There are large number
of sellers in the perfect competitive market who are known to sell homogenous product. It
also has a perfectly elastic demand curve.
Monopoly: a monopolist is the price maker since it is the single seller in the market. the
products sold in this type of market have no substitute. The entry and exit of the firms are
completely restricted. The demand curve in this market structure is downward sloping in
nature. They are also the price makers and have the high selling cost.
Oligopoly: there are only few big sellers who are known to operate in the oligopoly market.
There are also restrictions on entry of new firms. Firms under oligopoly fowls price rigidity.
Influence of price on scarce resource
When the product is scarce in nature, it will be having high demand and slow supply
which results to high price (Baumol & Blinder, 2015). Therefore, consumers are known to
place higher value on goods which are scarce in nature than on goods which are abundant.

ECONOMICS
Reference list
Bade, R., & Parkin, M. (2015). Foundations of microeconomics. Pearson.
Baumol, W. J., & Blinder, A. S. (2015). Microeconomics: Principles and policy. Nelson
Education.