Tap: Market Structures

Market structures are different all over the world for many different goods. One market structure that can be specifically observed is the small, fictional island of Tap. On the small island of Tap, there are multiple producers in one of their major markets, the corn industry. In the corn industry, as it stands today, each farmer in the market grows and then sells their corn at the market. As stated before there is many producers and sellers in the corn market on the island of Tap. With so many sellers the competition is cutthroat. With such a competition this causes the producers of the corn to set their prices low for their buyers. This makes them price takers in the industry. As time pass, Mega Company decides they would like to enter the …show more content…
One reason this may occur is that Mega Company could have received the right to enter the market and become only seller of corn in the industry. Being the only seller allows them to sell their corn at the price they want making the low prices hard to match for any competition wanting enter the market. This can be seen as barriers to enter the market. These barriers make it very difficult for new sellers to enter the market. It is difficult to enter because most of these barriers give exclusive rights to the sellers in the market. On the island of Tap, Mega Company received a license from the government to enter and take over the market for corn, which is one of the island’s main resources. On Tap Mega Company had the resources to get the corn from the farmers and possibly package and process the corn at a cheaper price. With this being said it can be seen that the corn market has turned into a …show more content…
Specifically in this market Tap changes between two market structures that are nearly complete opposites of one another. The Tapese market began as a perfectly competitive market and then changed once the government put in barriers to enter market when they gave Mega Company a license to produce corn. With entrance of Mega Company into the market it caused the price of corn to rise and as a result changed the demand for corn on the island of Tap. With the Mega Company’s control of the corn market it has changed the entire corn industry on the Island of