Q1. (a) Describe the four different types of competition in the private enterprise system.
The four types of competition in the private enterprise system are 1. Pure competition, which has many competitors around but is very easy to enter the business. The goods and services are similar to the ones that the competing firms offer and there is no control over the price by the individual firms. Examples of goods and services are chewing gum, water, apple, etc. 2. Monopoly is a type of competition that doesn’t really have any competitors because it is firms that are regulated by the government. The MTA is a good example, because you cannot compete with that they are single sellers that have these businesses. 3. Oligopoly has a few competitors but it is difficult to enter into the business because they are a few major sellers, the products they offer are for example phone service, cable TV, Airlines, etc. These companies do not have many competitors because it’s not really needed. 4. Monopolistic competition has few to many competitors and is a little difficult to enter the business because the goods and services they have to offer are similar products to the competitors but differentiated by the brand name and price. The individual firms have some control over the prices, examples of goods and services they offer are sports wear which look the same but have different prices depending on the brand names, local fitness center, etc.
(b) In which type of competition would each of the following businesses be likely to engage? 1.
a. small manufacturer of ice cream– Pure competition
b. Stop & Shop supermarkets – Monopolistic competition
c. Southwest Airlines – Oligopoly
d. large farm whose major crop is corn – Oligopoly
e. Google – Monopolistic competition
Q2. (a) How does the government measure the nation’s unemployment rate? The Government uses monetary and fiscal policy to fight unemployment, increase spending, and reduce...
References: Boone, L. E. & Kurtz, D. L. (2012). Contemporary business.
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