Maximizing Profits in Market Structures

increase Profits in Market Structures Christina Ransom University of Phoenix Brenda Lee XECO 212 March 25, 2012 maximize Profits in Market Structure As complex as the structure of the economy is, it is simple. Understanding how it works and the roles of the food securities industry structures layabout help maximize dineros and get more(prenominal) for ones money. pickings a look at competitive markets, monopolies, and oligopolies, this paper go forth give one a better understanding of the market structures. Competitive Markets First one must understand what a competitive market is, it is when you have both consumers and suppliers trading products that are similar products and both have a wrong to net that is acceptable. A competitive market can also be called perfectly competitive market and in that location are ternary characteristics. One, there are several that are consumers and suppliers within the market. Two, a lot of the goods sold by the many suppliers are very(prenominal) similar. Three, the different firms can enter and exit the market without restraint. Maximizing profit is the main objective for each market structure, profit=total revenue minus total cost.

In a competitive market, price is determined by what the consumer is willing to pay, because there are so many suppliers within the competitive market each supplier must have a price that is competitive with other suppliers, if not the customer will transport on to another supplier who is asking a more reasonable price. The price must be equivalent to the borderline cost; fringy revenue must exceed marginal cost in order to maximize profit. When figuring in quantity to maximize profit, a supplier must cogitate what would be most beneficial, if marginal revenue is more than than the cost, then(prenominal) they should increase the product, but if it is less than, then the supplier should abate quantity. So output is very important when figuring in the profit. Some barriers to entry in a competitive market are exactly the opposite for exiting. Because... If you want to get a full essay, order it on our website: Ordercustompaper.com

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