Maximizing Profits in Market Structures. By Damon DeVries.

First lets start with A perfectly competitive market. This simply is a market in which economic forces operate unimpeded. There are certain things a market must meet to be competitive the first being that both sellers and buyers are price takers, the second condition is there has to be a large number of firms, there must be no barriers to entry ,all the products from the firm’s must be identical and finaly there has to be complete information. A monopolistic competitive market is a market structure were firms sell products that are similar but not identical to one another. A couple characteristics of this market structure are a large number of sellers which means the firms compete. There is product differentiation . there has to also be free entry. We can now look at monopoly this would be a firm who is the only producer and seller of a product and there would be no close substitutes. A example of this would be say Microsoft with Windows or Apple with the MAC. Now we can look at the oligopoly is basically a market in which there are only a few sellers , each whom offer similar or sometimes identical to other firms. A few characteristics of a oligopoly are to start interdependent firms so this could be like companies who buy product from one another in order to produce their own goods. Again there are fewer sellers offering similar products. What you see with all these market structures is that all most all of them exist to make a profit and that most of them make similar or identical products what they do not share in common though is their profit margines. Some of these make almost no profit . Monopoly’s often enforce a barrier to entry in order to stop other firms from entering the existing market . They does this to