Maximizing Profits in Market Structures
Jermaine Adams
\University of Phoenix Axia College

Competitive markets, monopolies and oligopolies have characteristics that depend on the kind of good they are selling, the demand for that good, and the ability for others to produce those goods. Competitive markets have many small producers but are not able to set the price of their products but rather they choose a price that depends on the market that they are in. If they raise the price of their products consumers will likely choose to purchase from another supplier who offers a lower price. Therefore, typically the prices in competitive markets are often similar up to a certain price.
A monopoly is an individual company who has control of a product, either by permission of the government, or the limited ability of others to replicate it. Reasons that a monopoly may exist is because they do not allow competition from other suppliers because there is not a profitable reason to try and compete, or the government has granted patent over a specific product and only that company is allowed to produce those goods for up to 20 years. A monopoly has the ability to set its own price of a product because there are not other businesses around to challenge those prices. A monopoly may have a high profit for their products but it does not exceed the abilities for customers to purchase those products. Usually the more that a monopoly produces the price of its products is lower.
An oligopoly is similar to a monopoly except that it can have more than one supplier of the same product. Since the market for the products is similar, the amount produced affects the total profits earned. When the amount of output is increased by a supplier the amount of profits decrease.
A competitive market determines its price based on existing market values. If a supplier in a competitive market