Market is an extremely interesting thing and is closely related to people’s everyday lives. No one could actually live without the market, you have to buy vegetables and meat in the grocery stores,...

Market Structure Market is an extremely interesting thing and is closely related to people’s everyday lives. No one could actually live without the market, you have to buy vegetables and meat in the grocery stores, eat dinner in nice restaurants, buy a new car and so no. However, how much do you know about the market? In this paper, market structure will be given a detailed explanation based on my research. Market structure could be classified as four specific branches which are competitive supply, monopoly, monopolistic competition, and oligopoly. Competitive Supply Four basic characters In competitive supply market, many firms, low entry barriers for firms, standardized products and price taker of firms and consumers are the main four basic characters. According to the book of Managerial Economics and Organizational Architecture, “the soybeans market is an extremely good example for the competitive supply market. In soybeans market, many farmers grow soybeans and many consumers and firms purchase soybeans. Soybeans are standardized products. The entry barriers for soybeans are relatively low for firms because it does not cost so much money for firms. All the sellers and buyers of soybeans are the price takers. There is no single party having the power to control the market price.” Demand and supply curve The demand curve for the competitive supply is a straight line which is parallel to the X-axis. Marginal revenue and average revenue are equal in the competitive supply market. They are also both equal to the market price. It could be written as Demand=Marginal revenue=Average revenue. Supply curve for the competitive supply market is the marginal cost curve. In the short run, firms supply must at least cover variable cost. In the long run, firms supply must cover all costs which including the explicit cost and the implicit cost. Profit Maximize position The profit maximize position is the interception of marginal cost curve and marginal...