Research Paper on:
Pure Competition, Oligopolies, and Monopolies

Unformatted Sample Text from the Research Paper:
PURE COMPETITION In order to assume a perfect competition model four assumptions must be satisfied. First, there must be a large number of buyers and  sellers in the market place. Secondly, the product must be sold at the same price. Thirdly, consumers and producers must have perfect knowledge and lastly, producers must be  free to enter or exit the market without restriction. The relationship between marginal revenue and price is one of the features of the perfect competition model.  More long run price stability can be seen in a market when the firm continues to trade at the lowest point on the lowest point of the long run average  cost curve. This model of perfect competition is sometimes useful in its straightforwardness and prognostic ability in showing how these markets work. Demand, supply, resource allocation, price determination  and welfare are all issues covered by this model. In a perfectly competitive industry rather than that of a monopoly, the marginal social cost curve for a final product  is represented by a long-run supply curve for the competitive industry. But in the case of the hamburger stand, we are dealing with a monopoly. The long-run supply  curve will also coincide with the long-run average cost of the industry including the extra costs needed to produce the increased output. If, then, an industry does not in  fact perceive its marginal cost correctly, it does produce that level of output in which price is equal to marginal revenue (Freedman 175). It becomes obvious that in considering increasing  a business by increasing the number of units produced, it is important to consider the marginal cost of producing the increased number of units. It could be found that