What are the three market structures we see in oil, and what are the potential benefits...
What are the three market structures we see in oil, and what are the potential benefits and problems with each?
What variable will firms use to judge where to place their money?
Homework Answers
Answer: -
The three market structures in the oil industry are Oligopoly, Monopolistic, and Monopoly. However, the most common and prevalent in Oil Industry is Oligopoly which means few producers and a large number of Buyers. An example is OPEC which is an Intergovernmental Organization of Oil-exporting Countries. They have the control over oil supply and prices up to a large extent as they hold for more than 88% of world’s oil reserves. The advantage of oligopoly model is that the cost of service is lower as compared to monopolistic market but is more competitive. Prices are stable and interrelated but disadvantages are the strong barriers to join oligopolies.
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What are the three market structures we see in oil, and what are
the potential benefits...
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Please show all work. PART II. Problems 1. Suppose the market for canola oil is perfectly competitive. There are 1....
Please show all work.
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When we compare diagrams for firms in different market structures, what do we notice? For competitive firms and monopolistically competitive firms, the revenue curves are similar but the cost curves are quite different. For competitive firms and monopolistically competitive firms, the cost curves are similar but the revenue curves are quite different. For monopoly firms and monopolistically competitive firms, the revenue curves are similar but the cost curves are quite different. For monopoly firms and monopolistically competitive firms, the cost...
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Please show all work.
PART II. Problems 1. Suppose the market for canola oil is perfectly competitive. There are 1.000 firms in the market, each of which have a fixed cost of FC = 2 and a marginal cost of MC = 1 + q, where q is the quantity produced by an individual firm. Let s denote the total quantity supplied in the market. The market demand for canola oil is given by Qd = 15, 250 - 250P....
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