7. Market structures Aa Aa For each of the following scenarios, determine which

Question

7. Market structures Aa Aa For each of the following scenarios, determine which market model best describes the scenarlo. Then identfy the number of firms, the type of product, and the ease with which new firms can enter the market under this market structure. Number of Scenario Firms Type of Product Entry Market Model ] Throughout the world, there are hundreds of universitles that serve millions of students each year. The universities vary by location, size, and educational quality, which allows students with diverse preferences to find schools that match their needs. | There are dozens of pasta producers that sell pasta to hundreds of Italian restaurants nationwide. The restaurant owners buy from the cheapest pasta producer they can. While pasta manufacturers must pay licensing fees to their local government and undergo regular food-safety inspections, anyone who passes inspections can acquire and maintain their licence ] ] In a large city, two taxi companies own all the licences that the city has granted to operate taxis (and the city is reluctant to grant more) Consumers don't care which taxi company they take-if they decide it's worth taking a taxi, they flag down the nearest one. 1 The government has granted a patent to a pharmaceutical company for an experimental AIDS drug. That company is the only fim permitted to sell the drug.

Explanation / Answer

Scenario 1 is monopolistic competition where product is differentiated and large no of firms and free entry and exit

Scenario 2 is perfect competitiom, homogenous product and large no of sellers. However there are some fix cost but anyone can enter and exit freely.

Scenario 3 is oligopoly, homogenous product,few dominant sellers amd difficult entry

Scenario 4 is monopoly, single seller, homogenous product and dififficult entry and exit

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