Differentiating Between Market Structures
In order to understand the difference between market structures, it is vital to comprehend how supply and demand are affected by public and private goods, common resources, and monopolies. These structures directly affect how labor market equilibrium is established. There are a variety of organizations that show this market structure, which directly and indirectly affect labor supply and demand. For example, Wal-Mart is one specific company that displays characteristics from several different market structures.
All goods available for consumption have two major characteristics and are put into two categories: excludable goods, which consumers can prevent consumers who do not pay for it from using it, or rivalrous goods, which are goods whose consumption by one consumer prevents simultaneous consumption of another consumer. Four separate classifications divide the goods. The classifications are private goods, public goods, common resources, and natural monopolies.
Private goods are excludable, those which at low cost prevent those who have not paid for it from consuming it, and rival in consumption, those consumed for enjoyment by only one consumer. Most goods in the economy fall into this category. An example of a private good is designer clothing. A consumer can have designer clothing if the consumer is willing and able to pay for it, and once the consumer owns the clothing, no other consumer can have it.
Public goods are the opposite of private goods in that they are not excludable nor do they rival in consumption. A government rather than private firms often supplies them. National defense is an example of a public good. Consumption is non-rivalries because one’s consumer use does not interfere with another’s consumer use of national defense. Whether a consumer pays for the good or not, a consumer cannot be excluded