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Assessment Focus

WEEK 6

Markets & Government and the Economy

Assessment Task 2

This week is all about working on your second assessment task. Use this information to help you understand the implications of markets and how the government intervenes.
Assessment Task 2

Types of Markets

​Content 􀀌 Read this text before attempting the Google quiz.
​

Monopoly

Picture
​In a monopoly market structure, there is no competition. Only one firm is selling the good or service, so can essentially set whatever price it wants for the good. 
Of course, there needs to be demand for the product for firms with monopolies to make a profit, but they do not face competition from other firms to lower prices. This is bad for consumers, because they have to accept whatever price the firm sets or go without the product at all. It is also bad for the economy as a whole because without competition, there is no incentive for firms to innovate and become more efficient. 
Monopolies may develop where goods are unique so there are no close substitutes, and barriers to entry into the market are high, such as high set-up costs and regulations. 
State-owned enterprises often have a monopoly, and when they are privatised it is a challenge for the government to manage the process carefully to ensure a private monopoly does not result. 

Pure Competition

Picture
Pure competition is the ideal market structure, although it only really exists in theory. In this structure, consumers wield the most power. There are many small firms selling products that are the same, so there is a constant downward pressure on price. If a firm charged a higher price, consumers would simply buy an identical, cheaper product from one of the many other sellers.

​Firms are therefore price takers. There are no barriers to entry to the market, meaning that there is a constant source of competition. 

Oligopoly

Picture
​In an oligopoly, sellers generally have more power than consumers. There are only a few large firms and relatively high barriers to entry, which limits competition. The firms sell similar products, but with room for considerable differentiation. Firms do have to compete with each other, but prices generally remain relatively high because it is in all firms' interests not to provoke price competition, which would lead to lower prices for all. Instead, they compete on the basis of advertising and the slight differences between the products. 

Monopolistic Competition

Picture
​In a monopolistic market structure, consumers and sellers compete for power. There are many, generally small firms, and relatively low barriers to entry, which leads to strong competition. However, the products sold are similar but with some differences, which can give firms a competitive edge and some power to be price setters. 

What a Good One Looks Like

You can use this sample response to help you think about preparing your assessment response.
student_sample.pdf
File Size: 482 kb
File Type: pdf
Download File

This is another example of how you can create your response.
microeconomic_reform_cc.pdf
File Size: 535 kb
File Type: pdf
Download File


Here's a contemporary example on WATER

​

Screened on the ABC 11th June, 2020 730 Report
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  • Home
  • Assessment
    • Y11
    • Y12
  • FOR TEACHERS
  • Preliminary
    • THE ECONOMICS OF EVERYTHING >
      • WEEK 1
      • WEEK 2
      • WEEK 3
      • WEEK 4
      • WEEK 5
      • WEEK 6
      • WEEK 7
      • WEEK 8
      • WEEK 9
      • WEEK 10
      • WEEK 11
    • CURIOUS CHOICES >
      • WEEK 1
      • WEEK 2
      • WEEK 3
      • WEEK 4
      • WEEK 5
      • WEEK 6
      • WEEK 7
      • WEEK 8
      • WEEK 9
      • WEEK 10
    • THE WORLD IS NOT FLAT >
      • WEEK 1
      • WEEK 2
      • WEEK 3
      • WEEK 4
      • WEEK 5
      • WEEK 6
    • TO INFINITY AND BEYOND >
      • LABOUR MARKET INSTITUTIONS
  • HSC
    • THE GLOBAL ECONOMY >
      • INTEGRATION
      • TRADE
      • ECO DEVELOPMENT
    • AUSTRALIA'S PLACE IN THE GLOBAL ECONOMY >
      • AUS TRADE & FIN FLOWS
      • EXCHANGE RATES
      • PROTECTION IN AUS
    • ECONOMIC ISSUES >
      • ECONOMIC GROWTH
      • UNEMPLOYMENT
      • INFLATION
      • EXTERNAL STABILITY
      • INCOME & WEALTH
      • ENVIRONMENT
    • ECO POL & MMENT >
      • OBJECTIVES
      • FISCAL POLICY
      • MONETARY POLICY
      • MICRO POLICIES
      • LABOUR MKT POLICIES
      • ENVIRONMENTAL POLICY
      • LIMITATIONS
  • Contact