Throughout this paper we are going to discuss and explain many different economic subject matters. First we will compare and contrast public goods, private goods, common resources, and natural monopolies. This will be followed by an explanation of how labor market equilibrium is affected by the supply and demand of labor. Next we will select an organization and analyze the characteristics of that organization that make it a specific market structure. After the analysis we will discuss the implications of this structure for the organization’s profitability, and make recommendations that will help the organization sustain economic profits.
Finally, we will summarize the factors that affect labor supply and demand for our particular organization. In order to begin our discussion, we will need to start by answering the following question: What is a market structure table? It is defined as “the collection of factors that determine how buyers and sellers interact in a market, how prices changes, and the different levels of the production and selling processes interact.
There are four basic types of market structure.
These are: oligopolies, monopolies, perfect competition and monophony (where only one buyer is present in the market)” (Investor Word, 2012). When comparing and contrasting the market structure table, economists must be able to understand the different types of markets, the language, demand, supply etc. Being better prepared for the financial future is a must in this market if the individual or business what to know where they stand. Private goods are goods such as food, clothing, furniture, cars, etc. These goods can be rival or non-rival.
Rival are goods that consumers use to try to keep something from happening, and which they use when taking actions to prevent the same accident from happing in the future. Non-rival goods can be consumed by consumers and won’t hinder the consumption by others. Public goods are goods that can be used by an individual without being reduced from being available for another individual. Economists would define public goods as non-rivalrous and non-excludable. National defense, public parks and basic television can be considered as public goods.
Common resources are resources such as water or pastures that gives users tangible benefits. There is a concern with common resources in that they are being overused, that there are poor social management systems in place, and that instead of protecting the resources they are harming it. A natural monopoly is a single source of products to which no industry can increase the size or quantity of the supply. These supplies are water, electricity, and natural gas. The cost to possess a company like water or power is so high, it’s impossible for another company to compete with it.
Natural monopolies are utilities that are regulated by the government to keep them from exploiting outrageous prices. Natural monopoly cannot be compared to monopoly. Monopolies are concreted to be short-lived because of the technology that’s being developed competition for an industry. The labor marketer’s reaches equilibrium the amount of workers need or want to work for a certain amount pay. Employers also have reach whether or not they are willing to hire for amount of wages a workers is requiring. On the supply and demand curve employees are represent as the supply side while the employers represent the demand side.
The labor market can be effect by the equilibrium because the equilibrium is where the line of supply and demand crosses each other. So any shift in the supply or demand line can affect where the equilibrium is in the labor market. We can look at things that first could cause the supply line to increase which would make the line on the graph sway to the right. Some of the causes for this to increase is that wages go up, causing more people to want to enter the workforce, the population increases, or more homemakers want to enter the workforce.
Things that could make the supply line decrease, making the line sway to the left are: emigration, wages go down, more people wanting to become homemakers, or a rise in people collecting welfare. When the demand costs of materials go up and productivity goes down, costs of labor goes down. We will now look into an organization and put all the things that have been discussed into perspective. The organization that has been chosen is Fantastic Sam’s. This organization is a hair salon and would be consider perfect competition.
The reason for this is because there are many hair salons that they can compete with for business. If they can keep prices lower than their competitors, then this will help them make more customers, and ultimately a higher profitability. Since the company pays employees on commission, the stylists that work for them will want to serve more customers during their shifts. More customers for the stylists means more money for the salon. They are a large company so they will have power to make contracts with hair product companies.
They would be able to buy products at discount prices that they can sell at an increase to the customer. However, the increased cost to the customer could still be lower than the price the customer could find at other salons. Customers will be more tempted to buy their products at Sam’s that anywhere else, since they are already there getting their hair done. There are several things that could affect the supply and demand. One of them is keeping the customers wanting to come back. The time of the season will affect how busy they are.
If weather conditions are bad, they might not get as many people walking in. Another is cost. If costs are not low enough for the area, people would not be able to afford the services. Competition is also a factor. If there is too much competition in the area than people will be tempted to go to another salon. The last thing to consider is to keep good friendly stylists in the salon so that people get a great service and have a good experience with their stylist. Conclusion Economics is a very complicated topic, as we well know.
In order to understand its complexities, personalizing it can help make sense out of it. Throughout this paper, an effort was made to define the terms and address all the topics using a realistic approach. We selected an organization that one of our team members actually works for in real life. Applying the terms and definitions to the functions of this organization helped our group to see the ebb and flow even the smallest changes can make. Real life experience is usually always a great method to use when trying to explain your understanding of something.
Investor Word (2012) Investor Word. com http://www. investorwords. com/16551/market_structure. html Investopedia (2012) Investopedia Business Dictionary http://www. investopedia. com/terms L. W. Reed (2002) Supply and Demand of Labor Mackinac Center for Public Policy http://www. mackinac. org www. mackinac. org Economics, Fourth Editon, by R. Glenn Hubbard and Anthony Patrick O’Brien. Published by Pearson. Copyright 2013 by Pearson Education, Inc. Tomlison Videos (2012)” The Market Forces of Supply and Demand”
Cite this Differentiating Between Market Structure Table and Paper
Differentiating Between Market Structure Table and Paper. (2017, Jan 23). Retrieved from https://graduateway.com/differentiating-between-market-structure-table-and-paper/