Compare and Contrast
Compare and Contrast Economic Market Systems
In differentiating between market structures one has to compare and contrast public goods, private goods, common resources, and natural monopolies. All of these are major factors that need to be considered.
Public goods are those goods in which all of society benefit from and are equally shared among everyone within. These types of goods can be consumed simultaneously by several individuals without diminishing the value of consumption to any individual. The act of public goods being consumed by several individuals and not allow its value to diminish is known as non-rivalry. When shown graphically, non-rivalry shows that when each of the individuals within society shows a demand for a certain product or service, all the individual demand curves are shown to have a direct proportional relationship and show a vertical curve to get the aggregated demand curve for a public good.
Private goods are the direct opposite of public goods, the consumption of one individual will directly affect the diminishing value of consumption to any individual. Private goods are almost exclusively made for profit. A very good example of a private good would be the common food necessities such bread and eggs. With one individual consuming these products, the ability for others to consume the same product will diminish. This fact makes private goods rivalry since the value of the good is diminished for other individuals. When shown graphically, rivalry services and goods such as private goods shows that when each of the individuals within society shows a demand for it, all the individual demand curves are shown to have an indirect proportionate relationship and will show a horizontal curve to get the aggregated demand curve for a private good as shown on the graph below: A natural monopoly occurs when due to large fixed (Start-up) costs, decreasing continuous average cost occur over the range of production, so the government allows for
In differentiating between market structures one has to compare and contrast public goods, private goods, common resources, and natural monopolies. All of these are major factors that need to be considered.
Public goods are those goods in which all of society benefit from and are equally shared among everyone within. These types of goods can be consumed simultaneously by several individuals without diminishing the value of consumption to any individual. The act of public goods being consumed by several individuals and not allow its value to diminish is known as non-rivalry. When shown graphically, non-rivalry shows that when each of the individuals within society shows a demand for a certain product or service, all the individual demand curves are shown to have a direct proportional relationship and show a vertical curve to get the aggregated demand curve for a public good.
Private goods are the direct opposite of public goods, the consumption of one individual will directly affect the diminishing value of consumption to any individual. Private goods are almost exclusively made for profit. A very good example of a private good would be the common food necessities such bread and eggs. With one individual consuming these products, the ability for others to consume the same product will diminish. This fact makes private goods rivalry since the value of the good is diminished for other individuals. When shown graphically, rivalry services and goods such as private goods shows that when each of the individuals within society shows a demand for it, all the individual demand curves are shown to have an indirect proportionate relationship and will show a horizontal curve to get the aggregated demand curve for a private good as shown on the graph below: A natural monopoly occurs when due to large fixed (Start-up) costs, decreasing continuous average cost occur over the range of production, so the government allows for