Eco 204 Week 3 Assignment

ECO204 Week 3 Discussion 1Let’s assume that you own a fast food restaurant and you are faced with many customers each day eating in the restaurant without any tables. Describe the difference between the short run andlong run in the example to bringing about more tables for the customers. How is the restaurant able to differentiate between the short run and long run?As a restaurant owner my main concern is bringing in profit, as well as keeping customers happy.In a case where we are unable to satisfy all customers because we have a lack of tables, decisionsneed to be made quickly in efforts to solve this problem. For a quick fix we need to focus on short run options that we can adjust variable inputs. “Variable inputs are the productive resources that can be increased or decreased in the short run….. In this context, the short run is the period of time that is too short to vary all the inputs; one or more of the inputs must remain fixed.” (Amacher, R., & Pate, J. (2013) Section 7.4) By

ECONOMIC MARKET STRUCTURESEconomic Market Structures“Market structure refers to the characteristics of an economic environment in which businesses operate. The characteristics may include factors such as product differentiation, product demand and utilization, market entry requirements, pricing power, and the types and extent of industry competition.” (Miller, S. P. (2014).) There are four market structures to include monopoly, oligopoly, monopolistic competition, and perfect competition. This paper willdiscuss a real-world example for each market structure, long run profitability, cost efficiency, the success of inefficient firms, incentives for entrepreneurs, and discoursing entry barriers and whether or not these high entry barriers present competitive pressures in each market. This paperwill cover how each market responds to price changes, and each market’s elasticity. Finally I willdiscuss which market structure I would prefer to be a buyer and a seller in. Monopoly Market StructureA “Monopoly is the market structure in which there is a single seller of a product that hasno close substitutes.” (Amacher, R., & Pate, J. (2013).) A real life example of a monopoly is utilities; when you move into a house there are not multiple firms for you to choose from based on price or convenience, if you have city water and sewer there is one water company to choose from, and that is how your house has running water. And your home will also have electricity through one electric company option based on where you live. Entry barriers in a monopoly industry such as utilities, can include but are not limited to cost of investment, copyright laws, and holds over resources. To enter into the utility industry

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