Market Structures Student's Name Institutional Affiliation People from the Island of Tap are exposed to two market structures namely monopoly and perfect competition. Several factors contribute to the occurrence of the named market structures. The shift from the market structure known as perfect competition to that of monopoly has happened for the inhabitants of the Island (Tap). Antagonism between the sellers of corn in the Island was initially fierce and this made the price of corn to be antagonistic and low. After the company (Mega Company) brought together all corn farmers in the Island into a single facility the price of the product started to rise. This was because a single organization started to sell the produce and by this there was no rivalry (Weller Kleer & Piller 2015). In this regard Mega Company had the freedom to set the price of the commodity at whichever it desired. When to sell the corn as a sole seller. In this regard the situation in the market has shifted since for final consumers of the produce (corn) there is a single seller and the large numbers of consumers still exist. This means the market has now shifted into a monopoly market that is characterized by the ability of the seller to set prices. This is what made the price of corn to increase in the Island of Tap. References Auer R. A. & Schoenle R. S. (2016). Market structure and exchange rate pass-through. Journal of International Economics 98 60-77. McKenzie R. B. & Lee D. R. (2016). Microeconomics for MBAs: The economic way of thinking for managers. Cambridge University Press. Weller C. Kleer R. & Piller F. T. (2015). Economic implications of 3D printing: Market structure models in light of additive manufacturing revisited. International Journal of Production Economics 164 43-56. [...]
The small island of Tap, inhabited by the Tapese people, produces a single variety of corn. At the present time, each farmer produces his or her own corn, harvests it and carries it to the market for sale. On any market day in Tap, you will find many different sellers of corn. Competition between the corn sellers is very fierce-as a result, corn prices are quite low. Mega Company, the local beef producer, has announced that it wants to get into the corn business. The president of Mega Company believes that it would be more efficient to bring together all the farmers' corn at one large production facility where quality and packaging can be better controlled. Thus Mega Company acquires a license to enter into the corn industry, and begins buying all the corn from the individual farmers, packaging it, processing it and selling it in the market. The people of Tap are quite happy with the new packaging, and the uniform quality of the corn. However, the Tapese people also notice that the price of corn on the market begins to rise. Using your knowledge of market structures in microeconomics, explain the changes in the corn industry in Tap. Develop a response that includes examples and evidence to support your ideas, and which clearly communicates the required message to your audience. Organize your response in a clear and logical manner as appropriate for the genre of writing. Use well-structured sentences, audience-appropriate language, and correct conventions of standard American English.