Market Structure Essay Example | Topics and Well Written Essays - 2500 words

Market Structure - Essay Example Simultaneously, economics can be defined as a way of thinking. In the present day context, business units get largely impacted by the market structure of the place or a particular nation as business performance is directly dependent on how the economy behaves in the long run. Notably, on the basis of economic situations and other features, market structure of a place is divided into several forms including perfect competition, monopolistic competition and oligopoly and each one of them has their own characteristics or features. Business units have the need to analyze these particular features to ensure the accomplishment of their business targets (Baumol & Blinder, 2011; Hubbard, 2007). In this proposed discussion, the main aim will be to describe various market structures including perfect competition, monopolistic competition, oligopoly, and monopoly along with identifying a few of the characteristics of each of the market structures. Additionally, the paper will discuss the way in which high entry barriers into the market can influence long-run profitability of a firm. The paper will also discuss price elasticity of demand of each of the market structures and its impact on pricing of products to get a more comprehensive understanding about the same. Perfect competition describes such market conditions, where a large number of sellers are involved in business activities and also the sellers are dealing with homogeneous products. Notably, in this sort of market structure, none of the players are big or large enough to capture the entire market by their operations. In such market scenarios, each of the players in the market is competent enough to ensure perfect competition for others in the same market which further augments the level of competition in the market. This sort of market structure provides utmost opportunities for business units to perform in an effective manner; otherwise they might perish while attaining long-term sustainability (Baumol