Economics and Pure Competition

An example of a pure competition is a Kansas wheat farm. You can figure a wheat farm because a pure competition has a very distinguished amount of firms. They usually also have a standardized product. The biggest reason a Kansas wheat farm is a pure competitor is because they are a price taker with no control over the actual price. Pure competitors have little competition as well. An example of oligopoly is the steel industry. This is because an oligopoly has a small amount of firms. They have a pretty good grasp on price control but they also have a mutual interdependence with other firms. This is only because there are few that have identical products. Because there are so few firms that have the identical product there are many obstacles of entry. An example of pure monopoly is the U.S. postal service. There is only firm with a unique product. Usually only a pure monopoly is found within the government reins. The U.S. Postal Service has very little competition. Which allows for them to have control over the price. However, since UPS and FedEx have come about there is some competition. Before the entry was blocked so no other companies could produce the same products. Now it is different. An example of monopolistic competition would be a commercial bank. They have many firms with different products. They also have a small range in which they have control over the prices. It is very easy entry and has a good amount of competition for instance, brand names or advertising. With pure competition and monopolistic competition the long run profit is zero. The difference between the above stated are the prices. Pure competition is equal to the marginal cost, where monopolistic competition is greater that the marginal cost. In the short run both can be negative, positive or zero. The most obvious comparison between the two is that they both have many sellers. The biggest difference between the above and monopoly is that a monopoly has only one seller. This