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Market Structure Matrix and Strategic Choice Summary Worksheet
Part A: Market Structure Matrix
Begin this assignment by choosing an energy organization and differentiating among the four major market structures within the Market Structure Matrix provided below.
Market Structure Matrix
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Perfect Competition
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Monopoly
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Monopolistic competition
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Oligopoly
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An example of an organization
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Goods or services produced by the organization
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Barriers to entry
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Number of organizations
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Price elasticity of demand
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Economic profits
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Part B: Strategic Choice Summary
Then, because the oil industry has a tight grip on the energy market, prepare a 1,050-word summary assessment of the reasons for such market concentration sources and consequences of such significant market concentration. Is the oil industry a monopoly or an oligopoly? Explain your reasoning. How is price used as a tool to maximize profit in the oil industry? Please consider price elasticity of demand. If the government imposed a ceiling on energy prices, what effect would this have on the cartel, consumers, businesses and other related markets? What other regulation could the government impose to correct problems in the energy market and would this be different from a price ceiling?