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We have examined four market structures so far, (perfect) competition, monopolistic competition, oligopoly and monopoly. Please pick one market structure and find a (few) representative firms and explain why this firm's behavior is consistent with the market structure you choose. Make sure your source of reference is reliable.

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Darryn D'Souza
Darryn D'SouzaLv10
28 Sep 2019
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Related questions

Please analyze the barriers to entry for Starbucks. For the market your company operates in, you will detail the barriers to entry—some markets have more than others, and some barriers are weaker than others. Your specific situation will allow you to explain how the existing barriers will either help insulate your company from competition or allow for competitors to break into the market. Please describe the market structure for your firm and analyze how this affects the firm’s ability to influence the market. Keep in mind that there are four different market structures: perfect competition, monopolistic competition, oligopoly, and monopoly. You need to categorize your company’s market into one of these four. Include any supporting evidence you have presented so far. You can also use the four-firm concentration ratio and/or the Herfindahl-Hirschman Index (HHI) to support your conclusion. Once you have determined the market structure, you can then analyze your company’s ability to influence the whole market based on this and its position within the market. *this example uses the top 50 firms—you will not necessarily have to use that many.

What are the characteristics of perfect competition? Why does this type of fast-food restaurant tend to display characteristics of perfect competition?

Imagine you are running a firm with the characteristics of a perfectly competitive firm. Describe how your firm would maximize its short-run profits.

Why might firms in perfect competition choose to be open on Monday, typically the slowest day of the week, when their revenues do not seem to be sufficient to warrant doing so?

What are the long-run benefits of running a firm in perfect competition?

Under what conditions would your value-menu fast-food restaurant decide to be open on Mondays, and when would it decide not to be open on Mondays? When is losing money on Mondays still a good business decision?

Explain how your experience as a manager would change if the value-menu fast-food restaurant you were in charge of operated under a different market structure?monopolistic competition, oligopoly, and monopoly. For example, in each case, how would you decide what price to charge? What would your profits look like? Would consumers be better off in terms of welfare, when you compare a firm in monopolistic competition, oligopoly, and monopoly to one in perfect competition?

Two sources in addition to your textbook are required for this paper.

  1. write a two- to three-page paper (600 words minimum) examining perfect competition in the value-menu fast-food restaurant business. Address the following questions in your paper:
    1. What are the characteristics of perfect competition? Why does this type of fast-food restaurant tend to display characteristics of perfect competition?
    2. Imagine you are running a firm with the characteristics of a perfectly competitive firm. Describe how your firm would maximize its short-run profits.
    3. Why might firms in perfect competition choose to be open on Monday, typically the slowest day of the week, when their revenues do not seem to be sufficient to warrant doing so?
    4. What are the long-run benefits of running a firm in perfect competition?
    5. Under what conditions would your value-menu fast-food restaurant decide to be open on Mondays, and when would it decide not to be open on Mondays? When is losing money on Mondays still a good business decision?
    6. Explain how your experience as a manager would change if the value-menu fast-food restaurant you were in charge of operated under a different market structure?monopolistic competition, oligopoly, and monopoly. For example, in each case, how would you decide what price to charge? What would your profits look like? Would consumers be better off in terms of welfare, when you compare a firm in monopolistic competition, oligopoly, and monopoly to one in perfect competition?
  2. Two sources in addition to your textbook are required for this paper.

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