Market Structures Essay

Market structures refer to the interconnected characteristics or features that a market possess in regards to the strength of the buyers and sellers. Market structures further extend to product differentiation, easiness to entering or exit from the market as well as the level of collusion among these market structures. The main four basic types of market structures that do exist are monopoly, monopolistic, perfect competition and oligopoly market structures. Different market structures have different characteristics that make different business in the market to adapt and compete favorably in a market that is populated with demand for goods and services. The four market structures are a strategy by different business to counter the competitive …show more content…
The company, therefore, establishes a tendency by capitalizing on the company's position to restrict output by charging a particular price that is above the marginal cost. With such particular domination in the market, Microsoft is therefore allowed to choose between a price or quantity but not both of them. For the company to be able to record higher quantities by reducing their prices. If the prices of a monopoly product in this case Microsoft Corporation going higher, the consumers in this market may decide not to purchase anything at all. I believe that Microscope can retain its monopoly through sources such as economies of scope. In this case, Microsoft Company can decide to produce more than one product hence lowering the total cost of production. This is a good strategy since it makes it cheap when a business decides to produce more than one product in one firm jointly rather than in separate firms. The economies of scope might help the big Microsoft business by making it easy to access capital market hence making the working capital as well as funds to invest very easy to obtain as compared to the smaller