This week, we are discussing market types. In this forum, please pick one of the market types that are presented in your textbook(Economics For Today- rvin B.Tucker) and provide your own definition (use your own words) and example. What do you think are the benefits vs. deficiencies of your chosen market type?

Provide links to supplementary sources that you have found on the internet regarding this market type in general or a firm within this market type.

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Jarrod RobelLv2

29 Jun 2018

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See the question and two answers, give brief your own opinion for each answer( are you agree on disagree with the answer, why?)

Q:This week, we are discussing market types. In this forum, please pick one of the market types that are presented in your textbook and provide your own definition (use your own words) and example. What do you think are the benefits vs. deficiencies of your chosen market type?

Answer 1)

Perfect Competition

This kind of market type stipulates the overall advantage that a market has. In this market, there are many sellers and buyers.These players do not control the price of commodities or services but the prices are controlled by the demand and supply of goods and services. As a result of this, no one can determine the market price of commodities because customers will switch to the next best alternative. All the market players in this sense are price takers and the customers that subscribe to these goods have a lot of experience about the goods offered. It means therefore that they have adequate information about the goods available, which means, therefore, they are aware of the prices that are being charged. All the firms that exist in this kind of market type have a relatively small market share because of the existence of so many of them. The market is also characterized by free entry and exit of firms. New firms can enter the market if they so wish and create competition to the existing firms. Due to this nature of many firms, most of them only earn enough to keep them on the market and nothing more for these firms (Makowski & Ostroy, 2001).

Answer 2)

The Oligopoly; best recognized by few sellers, identical (or similar) products, and its difficult entryinto the market. A good way to determine if a market has an oligopoly is if the change in one seller, causes its "competition" to change likewise. Automotive, cell phone industries, and aviation are some examples of markets that have an oligopoly. In the automotive industry, if one vehicle producer (lets say Chevrolet) changes the body style of its line up, other "completion" is soon to follow. Notice how cars these days are getting nicer and nicer for the base model? Research and Development is greatly valued in an industry that has an oligopoly. This is because if a seller lowers prices, they understand that its competitors will soon follow with ease. But, if they develop a better improvement over its last model in technology, it is much harder to follow than just a reduction in price.

The advantage of an oiligolpoly is that the leaders can set prices instead of take them. Which leads to those that are in charge having the ability to increase profit margins above what they would be in a truly free market.

The disadvantage is that for those looking to try to get into the market will have much difficulty because of the common huge capitol expenditures required to actually compete with the big boys.

In this assignment, you will integrate your knowledge from all three weekly outcomes. After reviewing the âFrom the Expertâ video this week, consider the problem of the apple farmer. In your own words, explain the farmerâs optimal solution in the free market using marginal cost analysis. How might this solution be suboptimal from societyâs perspective? Explain who benefits and is harmed under the free market solution. Explain who benefits and is harmed under the government subsidy solution? Using economic analysis and the guiding principles of sustainability, justify which solution is best.

SPEAKER 1: Jan owns an apple orchard and it's harvesting season. She has a bumper crop and needs to calculate how many apples she should pick in order to maximize her profits. For thepurposes of this example, she will sell all of her apples to the local cider mill for $0.50 each.

Jan knows that to maximize her profits, she should continue to harvest apples until she reaches the point that the marginal revenue equals the marginal cost. Jan calculates her marginal cost usingthe cost of ladder rentals and the wages of the apple pickers.

The apples on the bottom third of the tree are the cheapest to harvest at a marginal cost of $0.30 per apple. This is because her workers can pluck apples off the bottom of the tree without a ladder.To harvest from the middle of the tree, employees will take more time to pick the apples, which increases the cost of labor. Also, a small ladder is needed. This increases the marginal cost to $0.45.Harvesting from the top of the tree would increase her labor costs per hour, and also requires renting a bigger ladder. This results in $0.55 cents marginal cost.

Since Jan can only get $0.50 for an apple, she will stop picking apples when the marginal cost is greater than the marginal revenue she receives. Thus, she will harvest the apples at the bottom of thetree, and she will make $0.20 per apple. She will also harvest those apples in the middle and make $0.05 per apple. However, she won't harvest the apples at the top, because she would lose $0.05on each one.

With this example, the market economy would theoretically deem it most efficient to just leave the apples high up on the trees to rot. Some people believe that the government should providesubsidies to industries that would leave food and other essential goods to waste. Subsidies, however, cost other resources and create an unfair market.

Should the apples at the top of the tree be left to rot? Or should someone step in and get involved? What do you think should be done?

Episode 3: Justice for the Poor - Youtube

Discussion Question to Students: In the video Stephen Grabill noted, "God affirms private property. He gives us boundary markers, mile markers, stones that mark one person's property from another person's property." Think about this: You cannot be generous with somebody else's stuff. You can only be generous with your stuff, which means its has to be your own property that you give away." Why would God care about private property? Is his concern connected to the role he has given us as stewards of creation?

Academic Honesty

Students must attest that all material must be of their own authorship, and when quoting another source or referring to another personâs work, a reference should be made in the appropriate manner.

Discussion Forums

Students are required to participate in the all discussion forums. Participation requires, at a minimum, an original response to the discussion question as well as one or more replies to the postings of other students. Discussion forums represent the facilitation of concept discussion during a regular classroom session. It provides the opportunity for students to interact with each other regarding a concept. The typical process of a threaded discussion is as follows:

The instructor will provide a PovertyCure episode discussion question.

Students will respond to the instructorâs post by submitting a response (at least 100 words) that answers the question or describes the concept of their choosing. As you create your response, be sure to reference information from the PovertyCure episode viewed for this discussion forum. The initial post of each student should conclude with a critical thinking question that will spur further discussion by other students.

Student responses to other students should begin by naming the individual to whose post you are responding, along with one sentence that summarizes his/her point. This way, a person reading your post will understand to whom you are responding. Students must respond to at least one (1) other student. Responds should be at least 50 words in length.

Other students will read the initial post and the follow-up posts and then respond to the question embedded in the student's response with critical thinking and another leading question. As students respond to each other, the thread of discussion builds throughout the week.

Students should submit their initial post within 48 hours of watching the PovertyCure episode in class. Responses to the initial posts by other students should happen within one work (168 hours) of the initial post deadline.

The faculty member will step in from time to time to support, clarify, or further facilitate the discussion.