econ paper grammer

The market is engaged in a certain commodity trading market place or point of contact. Any kind of goods have a market. There are four different types of market structures, And I would like to compare two of them, the perfect competition and monopolies.

In a perfectly competitive market, there are numerous buyers and sellers in the market, the products are basically the same quality or no difference, it is a free flow of information and the market fully. Because of the long-term production, the long-term equilibrium of a perfectly competitive manufacturers only a state: all manufacturers have reached zero profit equilibrium, only to obtain normal profits. At first, the competitive enterprise long-term only zero profit is not possible, no profit enterprises will not stay in business. However, because the total cost includes all the opportunity costs of the firm, especially the total cost, including business owners for the operation of the time and money opportunity costs, profits in equilibrium, earnings should compensate owners expect the enterprise to maintain the terms of time and money.

For example, suppose a farmer to invest 1000000 dollars to reclaim his farm, he must give up other jobs a year can earn money. In this way, farmers farming includes the opportunity cost he earned from $1000000 in interest and give up a salary of $20000. Even if his profit is zero, but he returns from farming in the opportunity cost of his compensation.

For the complete monopoly market, only one manufacturer in the market. The vendor sold goods are not substitutes. For manufacturers, to enter into a complete monopoly market is very difficult, and the monopolist can control and manipulate prices. A competitive firm is a price taker, and monopoly enterprises are price setters. Postal, railway and other public utilities are completely monopoly industries.

The monopoly market mainly have four kinds, natural monopoly, control the source of raw materials, has a patent or a government concession. In the monopoly market conditions, only one vendor, because other vendors can not enter the industry, the monopolist can maintain the monopoly profits, and the scale of production through the adjustment, to limit production to raise prices, thereby gaining greater monopoly interests. In the monopoly market, not only the average revenue increased with the increase of the sales volume decreased, and the marginal revenue is increased with the decreasing sales of goods. However, in the condition of decreasing average income, commodity prices are still equal to the average income, but higher than the marginal revenue, therefore, the enterprise profit maximization conditions is still marginal cost is equal to marginal revenue.

A monopolist can adjust all production factors in the long term, the scale of production, so as to achieve the maximum profit. At the same time, the possibility of monopoly industry, the exclusion of other manufacturers to join it, and completely different competitors, if the monopoly profits in the short term, then his profits over a long period of time will not disappear because new firms join, monopoly manufacturers can keep profits in the long term.

However, in real life, a perfectly competitive market and monopoly market are difficult to form. So in fact we are now the market is not completely monopoly market is not fully competitive market, but to the "monopolistic competition", is a kind of monopoly and competition market structure. The condition is: there are differences in the same product in terms of quality, packaging, brand, sales conditions more manufacturers. In this market, the producers maintain their differentiated products position in the short term, but in the long term, competition is forcing manufacturers to make a product innovation, monopoly disappear. This also have the monopoly and competition of the composition of our current market, produced a great impression on our real life.