I.

1. How does market structure affect the local economy?

- Market structure stimulate the local economy and increase competition. The different existing market structure helps
people in the local to develop their own small businesses. For an instance, if local A sells a product that can be found in
their community, local B will also think to sell something that is similar to what local A is selling. Market structure also can
encourage the local to be innovators. If local B does not want to sell the same products with local A, he may innovate a
close substitute products to sell. Though, market structure can increase competition, it may create more jobs to the
community if more people will start a business. The local economy well then develop, expand and create more
employment which is what the local area requires.
2. What is the difference between a monopoly from an oligopoly?
- In a monopoly, a single seller dominates the market by offering a unique  product for which no substitute exists. In
contrast, in an oligopoly, the firm's product or service is either similar or distinct, with close substitutes. There is no
competition in a monopoly because there is only one seller of a product or provider of a service. On the other hand, in an
oligopoly, there is an intense competition among the firms because there are barriers that make it difficult to entry. In an
oligopoly, firms set product prices based on the price of the same product offered by the market's rival seller, which is
the polar opposite of a monopoly because there are no rivals.
3. Do you think it might be efficient for an industry to be perfectly competitive rather than monopolistically competitive?
Defend your answer.
- an industry being perfectly competitive is both allocatively efficient, because price is equal to marginal cost, and
productive efficient because firms produce at the lowest point on the average cost curve. It is also x-efficient because
competition between two firms will act as an incentive to increase efficiency. On the other hand, because a good is
always priced higher than its marginal cost, a monopolistically competitive market can never achieve productive or
allocative efficiency. Also, suppliers in a monopolistically competitive firms will produce below their capacity.

4. Perfect competition is defined by homogeneous product. Explain.

- Homogenous product perfectly describe perfect competition because buyers in a perfectly competitive market regard
products produced by different firms as homogeneous. As a result, they are willing to pay the same price for products
 from different companies. As a result, no firm can charge a price that is higher than the market determined price making
the competition between sellers perfect.

II.
Complete the table below.
Market structures Number of sellers Product differences Imposition of prices In and out in the Example
industry
1. Perfect Large number of Homogenous or A price taker, they Very easy entry and No market fits the
competition small firms. identical product. take the market exit. perfect competition
price. but agriculture sector
or farm products is
almost a perfect
competition.
2. Monopolistic Many small firms. Differentiated A firm takes the Face low barriers to The clothing industry
competition products but not prices charged by its entry and exit because firms have
perfect substitutes. rivals compare to differentiated
monopoly. products and market
power.
3. Monopoly There is only a Offers unique Lowers the price to Impossible entry due AKELCO and Metro
single or one products that have sell more output. to many barriers. Kalibo Water District
seller. no close substitute. in Aklan.
4. Oligopoly Relatively few Either homogenous Once a price has Very difficult to Operating systems
large firms or few or differentiated been determined, enter and compete in such as Android,
sellers/suppliers. products. other firms will stick the market. Windows, iOS, and
at this price. OS X