With perfect competition you need people selling the same products or nearly the

Question

With perfect competition you need people selling the same products or nearly the same products. An example of this that I have used in my life is a farmers market. At farmers markets people are selling the same fruits and vegetables but some of them are farmed a little different. This affects the products people sell because farmers need to be basically on trend with what people are wanting to buy like organic and GMO free foods, and what fruit and vegetables are in season at the time of sale. Government regulation would just make everything the same so I don't think it would either benefit it or hurt it really. Monopolies are something that has a market to their own and can basically set their own prices and people have to listen to them because they are the only one out there. An example or a monopoly in Oklahoma would be Chesapeake energy which is a natural gas corporation based in Oklahoma. Having this be a monopoly definitely affects the pricing of natural gas because people need it and cant really go without it. So the company can put it at any price. I think if the government took control over this it would help people because then the price would be the same and the same all around Oligopolies are where a select few companies have control over a market and can set prices themselves. An example of this would be apple phones versus android phones. They are two options in the market that just about everyone own one or the other so they dominate the market and the prices are very similar. I think it affects the price of the products somewhat but to engineer the phones and the elements on the phones itself can be pretty pricey so the phone it prices somewhat appropriate. It would not do much good if the government regulated it because there wouldn't be as much advancements in the products as there is now A monopolistic competition would be something where differentiation is possible between things. An example of this would be restaurants because there are all different type of restaurants will all different prices and everything can be different. When people are in competition with one another there needs to be a lot of differences with food prices and aesthetic differences with places to keep people coming back to them instead of the competition. If the government were to run restaurants it would not make sense because it is not just one regulated thing out there like some other things would be, so if the government regulated it, it would not be beneficial at all

Explanation / Answer

It is all agree.

The perfect competition is a market where the firms sells homogenous or identical products in the market. And there are large numebr of buyers and sellers in the market. The perfectly competitive firms cannot control the market prices because they are selling identical products. If any of the producer charges a higher the consumers will immediately switch to another products because the products are close substitutes. There is no real life situation that fully satisfy all the assumptions of the perfect competition, but here the agriculture market does satisfy the most of the assumptions.

The monopolies are the single seller in the market, because there is only one seller he can charges any price he wants. The monopolist charges a price above the marginal cost that would maximize his profits, this pricing is socially inefficent because some customers would not buy the product at the higher prices. To the pricing to be effective it must be equal to the marginal cost of monopolist. The government is needed for decreasing the market power of the monopolist such as increasing competition through anti-trust laws or public overtaking.

In oligopoly there are only few firms in the market and if the firms made collusion together they can set the monopoly price. But this is difficult there is chance of cheating from every firm in the market. The interdependence between the firms is the biggest characterstics of the oligopoly firm.

The main feature of the monopolistic competition is they producers are selling differentiated products so they also have some market power in the short run. In the long run due to the free entry and exit the firms will be earning zero economic profit. If there is government intervention in the monopolistic market there will be losses for the firms. In the long run they already running on zero economic profits so the government intervention will reduce the price and will lead to the losses to the firms.

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