Monopolistic Competition Competitive Market Structure

Perfect Competition â€Å"Perfect competition is the market structure in which there are many sellers and buyers, firms produce a homogeneous product, and there is free entry into and exit out of the industry†(Amacher Pate, 2013) Real Life Examples A good example of perfect competition will be foreign exchange market because the currency is homogeneous. As well traders will have access to different buyers and sellers. When buying currency its easy to compare prices. Influences of High Entry Barriers in perfect competition At this moment, firms experience no barriers of entry.†¦show more content†¦Another example is U.S. Steel which was in the past but still apply as a monopoly. U.S. Steel was founded by JP Morgan and Elbert Gary and incorporated 3 of the largest steel companies in the world Carnegie Steel, Federal Steel Company and National Steel Company. Influence of high entry barriers into monopoly monopolies normally maintain their position of dominance in a market because it is too costly or difficult for potential rivals to enter the market.the three major barriers to entry this market are legal restrictions, economies of scale and control of an essential resource. Are competitive pressures present in markets with high barriers to entry? Explain. There s always competitive pressure in all markets. Competitive pressures are present in markets with high entry barriers. The competition is when there is product quality competition between firms producing similar products and when viable substitutes to the products a specific firm is producing are introduced into the market mostly of the time for less price , as well we have to keep in mind that if the product is good people will still buy it even though is more expensive because most of the time cheaper products arent good as the original. 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