Name: Claire Ann B.

Diaz Date: August 15, 2019

Course & Year: BSAB-3 Managerial Economics 3:00-4:00

1.) What are the market structures?

2.) Describe each and please include references to where you got your information.

 Perfect Competition Market Structure - In a perfectly competitive market, the forces

of supply and demand determine the amount of goods and services produced as well as
market prices set by the companies in the market.

 Monopolistic Competition Market Structure - Unlike perfect competition,

monopolistic competition does not assume lowest possible cost production.
  Monopoly Market Structure - Monopolies and perfectly competitive markets sit at
either end of market structure extremes. However, both minimize cost
and maximize profit. Where there are many competitors in a perfect competition, in
monopolistic markets there’s just one supplier.

 Oligopoly Market Structure - Not all companies aim to sit as the sole building in a city.
Oligopolies have companies that collude, or work together, to limit competition and
dominate a market or industry. The companies in these market structures can be large or
small, however, the most powerful firms often have patents, finance, physical resources
and control over raw materials that create barriers to entry for new firms.

References: https://blog.wallstreetsurvivor.com/2016/08/01/4-market-structures-in-economics/

3.) Give an example of each market structure.

PERFECT COMPETITION

Imagine yourself as a street food vendor, selling tacos topped with fried onions, ground
meat, cheese, fresh tomatoes and dollops of guacamole and spicy sauce in the main plaza of a
town close to the border of Mexico. There are three other taco vendors on the other corners of
the plaza selling the exact same thing of the same quality. None of the other vendors (nor you)
can change the price, because everyone knows that the deal is 3 tacos for $5. Anyone else who
wants to sell tacos on the street can do so, and if you want to quit and sell something else one day
(or sell your tacos at one of the many other public spaces in your town), no one is stopping you.
A business expert might describe this as perfect competition (or a perfect market or pure
competition), which means an equal level for all firms involved in the industry.
MONOPOLISTIC COMPETITION

While everyone may be selling white t-shirts, in a monopolistic competition, each seller
is attempting to achieve profits by convincing the consumer (you) that their white t-shirt is better
than that which the other competitors are selling. They can do this in a number of ways. These
can include arguing that their shirts are of a better quality, that they won't shrink, or that they
have no tags. They might even argue their t-shirt's quality simply on the basis of their brand
name.

MONOPOLY

This occurs when all market power is under the control of one firm. Can you think of an
industry that would be difficult to enter because it would require huge start-up costs? One
example may be the gas utility company that you pay to heat your home and water. Can you
imagine all the land, facilities, machinery, and technology you would have to purchase, as well
as all the pipelines you would have to lay, to start in this business? These extremely high capital
costs are often referred to as barriers to entry. Barriers to entry, such as high start-up costs,
specialized technology, or difficult licensing and regulation requirements in an industry limit the
number of possible entrants into the industry. It is simply too expensive and risky to get started.

OLIGOPOLY

An oligopoly consists of a select few companies having significant influence over an

industry. Automobile manufacturing is another example of an oligopoly, with the leading auto
manufacturers in the United States being Ford (F), GMC, and Chrysler.
4.) What is the market structure in your locality? Why do you say so? Please provide a photo.

My locality is the best example of perfect competition. A large number of buyers and
sellers are present, and all are engaged in the buying and selling of the homogeneous products at
a single price prevailing in the market. For example, in Baybay Public Market where you can by
dressed chickens, vegetables, fruits and meats, they sell an identical product at the same price.