Evaluating market structures

Google Scholar Register, C.

Market structure definition

As well as this the perfect information does not allow there to be any abnormal profit there is also direct price response to demand and supply. This type of market structure is profitable to consumers because there is no choice and therefore everyone is buying the same product. However if there is no regulation then given the company is able to dictate its prices, it is possible for the price to be set very high and rip off the consumer, as their company is the only place to buy the product. Google Scholar Kooreman, P. The structure of a market refers to the number of firms in the market, their market shares, and other features which affect the level of competition in the market. This can be demonstrated in a single train station in a town, this will always be in demand as it is a necessity for people who cannot travel by other means. The company is government regulated to ensure that the consumers are getting a fair price for this inelastic product, therefore it is run very efficiently keeping the price close to the costs. The results suggest that the number of competitors in the market contributes positively to technical efficiency and there is some evidence that the differences in efficiency scores are attributed to several environmental factors such as ownership, market structure and regulation effects.

If not regulated there is a high chance that the price will be unfair to the consumer in a natural monopoly as there would not be an implemented price ceiling and they would want to make as much profit as possible. There is a spectrum, from perfect competition to pure monopoly.

Google Scholar Greene, W. Firstly, using patient origin data from hospitals in the region of Catalonia inwe estimated geographic hospital markets through the Elzinga—Hogarty approach, based on patient flows.

To combat this it is possible to implement a price ceiling in order to prevent this from occurring. An example of this could be a farmers market, where all the stalls sell homogenous products for the same price. References Abel-Smith, B.

market structure analysis

Perfect competition is also very efficient and while the products may not be high quality it will always be available. According to the data nearly two-thirds of the hospitals operate under the production frontier with an average efficiency score of 0.

Finally, the determinants of the efficiency scores were investigated using a censored regression model.

Competitive structure vs competitive behaviour As well as considering market structures, modern theory also looks at the behaviour, or conduct of firms, their performance, and the level of contestability in the market. Marx, R. Google Scholar Zwanziger, J.

Hadley, and L.

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Evaluating Different Market Structures