Market Structure of Airlines
Market Structure of Airlines including a Market Structure Table
Each business that operates provides goods of some nature, public, private common resources, or natural monopoly. To provide these goods to consumers and make money businesses are subject to Supply and Demand costs of labor as well as the Market Structure of its competition. Using knowledge in all of these aspects of economics it is apparent that Airlines are subject to these factors as well, how the economy works can be analyzed easier when taking a look at its components rather than the economy.
Analyzing Market Structures by Types of Goods One way of differentiating between market structures is to compare and contrast them; public goods, private goods, common resources, and natural monopolies are a good place to start. Public goods, private goods, common resources, and natural monopolies all provide some type of products or service to people. Private goods are both rival and excludable, which means that when an individual consumes a unit of a good another cannot consume it and that to consume the good it must be paid for. Private goods have similarities to common resources and natural monopolies. Private goods and common resources are both rival; and natural monopolies sell rival products. Public goods have similarities to common resources and natural monopolies as well because they are not excludable. For instance, drinking water that is not bottled is usually something one can obtain without payment. Although natural monopolies are mostly consist of private goods, a natural monopoly like Walmart provides drinking fountains just like community centers (public goods). Nature also provides common resources like a running stream for people to drink water without consumer’s payment. The differences between these structures are more pronounced more than the similarities. Public goods and private goods are the opposite of one another. Private goods are rivalrous and excludable
Each business that operates provides goods of some nature, public, private common resources, or natural monopoly. To provide these goods to consumers and make money businesses are subject to Supply and Demand costs of labor as well as the Market Structure of its competition. Using knowledge in all of these aspects of economics it is apparent that Airlines are subject to these factors as well, how the economy works can be analyzed easier when taking a look at its components rather than the economy.
Analyzing Market Structures by Types of Goods One way of differentiating between market structures is to compare and contrast them; public goods, private goods, common resources, and natural monopolies are a good place to start. Public goods, private goods, common resources, and natural monopolies all provide some type of products or service to people. Private goods are both rival and excludable, which means that when an individual consumes a unit of a good another cannot consume it and that to consume the good it must be paid for. Private goods have similarities to common resources and natural monopolies. Private goods and common resources are both rival; and natural monopolies sell rival products. Public goods have similarities to common resources and natural monopolies as well because they are not excludable. For instance, drinking water that is not bottled is usually something one can obtain without payment. Although natural monopolies are mostly consist of private goods, a natural monopoly like Walmart provides drinking fountains just like community centers (public goods). Nature also provides common resources like a running stream for people to drink water without consumer’s payment. The differences between these structures are more pronounced more than the similarities. Public goods and private goods are the opposite of one another. Private goods are rivalrous and excludable
References: Demand Media Inc.. (2010). Airliners.net. Retrieved from http://www.airliners.net/ Hubbard, R., & O 'Brien, A. (2010). Economics (3rd ed.). Boston, MA: Pearson Hall. Herbst, R. (n.d.). How the Largest U.S. Airlines Stacked Up in 2009. Seeking Alpha. Retrieved from http://seekingalpha.com/article/194821-how-the-largest-u-s-airlines-stacked-up-in-2009 Lafaive, M. (2001). Supply and Demand and the Labor Market. Mackinac Center for Public Policy. Retrieved from http://www.mackinac.org/3818 Zachary, G. (1999). Many Industries Are Congealing Into Lineup of Few Dominant Giants. The Wall Street Journal. Retrieved from http://www.wright.edu/~tdung/oligopoly.htm