Module 6 Homework
Module 6 Homework
Module 6 Homework
Leah Cummings
Allied American University
Author Note This paper was prepared for ECN 150, Module 6 Homework taught by Professor Danielle Babb.
PART I
SYSTEMS OF BUSINESS ORGANIZATION
Economists assemble businesses into 4 different market structures: pure competition, pure monopoly, monopolistic competition, and oligopoly. These 4 market representations contrast in numerous respects: the quantity of companies in the industry, whether those companies create even merchandise or attempt to distinguish their merchandises from the products of further companies, and how simple or tough it is for companies to move into the trade.
Pure Competition
Pure competition consists of an immense quantity of companies manufacturing a uniform product. New companies can move into or withdrawal from the industry effortlessly. In a purely competitive market, different companies exercise no substantial control over merchandise charge. Each company creates such a minor segment of whole yield that increasing or lessening its production will not noticeably impact overall resource or merchandise price. Coffee is a cash crop that’s value fluctuates in the global market contingent upon supply and demand. In 1994, the trade embargo was lifted by the United States on Vietnam. At the same time, Brazil, the world’s largest coffee producer, was expanding its plantations. This resulted in increased supply pressures. As a consequence of the well-organized manufacture of coffee, Vietnam was able to vend coffee at a lesser charge in the global market than the supplementary coffee dealers. This lesser amount was occasionally lower than the cost of production of suppliers in countries like Colombia, Nicaragua, Brazil and Ethiopia resulting in closing down of plantations. According to the Schoenholt’s 2002 article, “the World Bank looks upon Vietnam 's coffee victory with pride. ‘Vietnam has become a successful producer,’ the San Francisco
Module 6 Homework
Leah Cummings
Allied American University
Author Note This paper was prepared for ECN 150, Module 6 Homework taught by Professor Danielle Babb.
PART I
SYSTEMS OF BUSINESS ORGANIZATION
Economists assemble businesses into 4 different market structures: pure competition, pure monopoly, monopolistic competition, and oligopoly. These 4 market representations contrast in numerous respects: the quantity of companies in the industry, whether those companies create even merchandise or attempt to distinguish their merchandises from the products of further companies, and how simple or tough it is for companies to move into the trade.
Pure Competition
Pure competition consists of an immense quantity of companies manufacturing a uniform product. New companies can move into or withdrawal from the industry effortlessly. In a purely competitive market, different companies exercise no substantial control over merchandise charge. Each company creates such a minor segment of whole yield that increasing or lessening its production will not noticeably impact overall resource or merchandise price. Coffee is a cash crop that’s value fluctuates in the global market contingent upon supply and demand. In 1994, the trade embargo was lifted by the United States on Vietnam. At the same time, Brazil, the world’s largest coffee producer, was expanding its plantations. This resulted in increased supply pressures. As a consequence of the well-organized manufacture of coffee, Vietnam was able to vend coffee at a lesser charge in the global market than the supplementary coffee dealers. This lesser amount was occasionally lower than the cost of production of suppliers in countries like Colombia, Nicaragua, Brazil and Ethiopia resulting in closing down of plantations. According to the Schoenholt’s 2002 article, “the World Bank looks upon Vietnam 's coffee victory with pride. ‘Vietnam has become a successful producer,’ the San Francisco
References: Krugman on the global crisis [Video file]. (2012, May 11). Retrieved from https://www.youtube.com/watch?v=b6kkGx47FPY MIT OpenCourseWare. (2012, January 24). Lec 14 | MIT 14.01SC Principles of Microeconomics [Video file]. Retrieved from https://www.youtube.com/watch?v=WbE2USh7RKI PERFECT COMPETITION, PROFIT MAXIMIZATION. (n.d.). AmosWEB is Economics: Encyclonomic WEB*pedia. Retrieved from http://www.amosweb.com/cgi-bin/awb_nav.pl?s=wpd&c=dsp&k=perfect+competition,+profit+maximization Upadhyaya, K. (n.d.). What are the characteristics of a perfectly competitive market? Retrieved from http://www.preservearticles.com/201104115243/what-are-the-characteristics-of-a-perfectly-competitive-market.html