Is dreamworld exist in a perfect competition environment

Essay by frank871University, Bachelor'sB, April 2005

download word file, 4 pages 4.3

Nowadays, a lot of businesses are running under the different market structures. In fact, there are four different types of market structures operating in the real world market competition. In order to lay out them, they are perfect competition, monopoly, monopolistic competition and oligopoly. In this essay, it will determine the differences between the perfect competition model and the Theme Park industry. The perfect competition can be defined as a market structure characterized by a large number of small firms a homogenous product and very easy entry and exit from the market in comparison, the Theme Park industry can be defined as a large outdoor area where people pay to go to enjoy themselves. All the different attractions in a theme park are usually based on the same idea or theme which apply to the oligopoly market structure. The following essay will be discussed under the aspects: market structures, policy of theme park and the economic theories.

In the first place, there are some differences between the perfect competition and the oligopoly market structure. Firstly, business which is running under the perfect competition market structure, there is a large number of small firms, each firm acts independent rather than coordinating decision collectively. For instant, there are thousands of fruit farms in Australia, under the competition any single farm raises or lowers their price; the going market price for each kind of fruit is unaffected. In addition, if the product belongs to a homogenous, then the buyers are indifferent as to which seller's product they buy. This means the good or service of each firm is identical. all firms produce as standardized product in the market place. Thirdly, it is very easy for a new firm to enter the market and also for some firms to exit. In other words, there...