Introduction
Economists groups industries into four distinct market structures: monopoly, oligopoly, monopolistic competition, and pure competition. These four market models differ in several different ways in regards to the number of firms are in the industry, whether those firms are producing a standardized product or try to differentiate their products from those of other firms, and how easy or difficult it is for firms to enter into the industry. In a monopoly there is only one firm that is producing a standardized product. An example of a pure monopoly is the Major League Baseball that differentiates them in respect to improving its product by having control of what comes in and what goes out. (Description of Oligopoly goes here when it is turned in) In a monopolistic competition there a large numbers of sellers producing differentiated products. “There is a widespread non-price competition, a selling strategy in which one firm tries to distinguish its product or service from all competing products on the basis of attributes like design and workmanship.” (McConnell & Brue 1) A good example of this is Best Buy who unlike other competitors provides a number of customer service options such as Geek Squad computer service and personal shopping assistants. (Description of pure competition)
Monopoly
“Pure monopoly exists when a single firm is the sole producer of a product for which there are no close substitutes” (McConnell & Brue). Major League Baseball (MLB) fits the description of a monopoly. Since 1922, it has operated with an antitrust exemption, giving it additional monopolistic power (Rovell, 2001). With an absence of competition, team owners can raise ticket and concession prices every year to maximize profits. MLB continues to set attendanc ...