Economics #3

The setting in which a seller finds itself is a market structure. Market structures are defined by their characteristics, such as the number of sellers in the market, the product that sellers produce and sell, and how easy or difficult it is for new firms to enter the market. Since lacrosse is becoming such a popular sport the lacrosse market is increase incredibility. The market has increased their sellers and their products. The lacrosse market is doing so well that it is categorized as a perfectly competitive market:

• the market has many buyers and many sellers
• all firms sell idectical goods
• buyers and seller have relevant information about prices, products quality, sources of supply, and so on
• firms have easy entry into and exit out of the market

Most products in the lacrosse market are at equilibrium price. this means that if a shafts costs $75 it will stay at that price, it will not go up nor down. Those sellers are called price takers. Price takers are sellers that can sell all its output at the equiiblrium price but can sell none of its output at any other price.

There are many single sellers in the lacrosse market, these sellers are catagorized in a monopolistic market.

The lacrosse market is a public franchise. It is not run by the government. because the lacrosse market is increasing they don't have to deal with a natural monopoly. A natural monopoly is when a firm with such a low average total cost that only it can survive in the market.

Antitrust laws were drawn up in order to control monopoly power. This, now does not conflict with the lacrosse market just because their are not a lot of seller, but in the future this will conflict with lacrosse a lot.

A monopolistic competitive market is were the market includes many buyers and many sellers, firms produce and sell slightly differentiates products, and firms have easy entry into and exit out of the market. I feel that the lacrosse market is not yet at this point but yet very close. The opposite of a monopolistic competitve market is a oligopolistic market. An oligopolistic market is a market structure that is characterized by few seller, the production and sale of identical products, and signigicant barriers to entry. I feel that the lacrosse market is starting to walk away from this.

Cartel agreement is an agreement that specifies how the firms that entered into the agreement will act in a coordinated way to reduce the competition among them. Price discrimination is a practice by which a seller changes different prices for the product it sells when the price differences do not reflect cost differences.