There are four types of market structures are Perfect Competition, Monopoly, Monopoly Competition and Oligopoly. Long run is the period of time that the firms are able to adjust the variable cost and fixes cost. In the long run, seller has sufficient time to enter or exit the market but need to base on the profits. Short run is not a definite period time and it can just modify the variable cost only. Short run don’t have sufficient time to entry and exit the market because it didn’t register the business.

Variable cost is a periodic cost that can change or based to the sales profit of a company. Examples for the variable cost are labor, raw material, etc. Fixed cost is a cost that cannot change when the quantity is increase or decrease. Examples for fixed cost are rent, buildings, capital, machinery, etc. Marginal Revenue is when selling goods or doing business gains the total profit from the product or business. Marginal cost is the total cost that when making a product, the purpose of analyzing marginal cost is to determine an organization can achieve their economics of limits.

Main Body

Perfect Competition

What is Perfect competition? Perfect Competition are describes markets such that not enough market power to set the price of an identical product. The multi-national example for the perfect competition is egg, rice, wood and flour.

Characteristics

There are many characteristics under perfect competition; the first is Identical or Homogenies Product. This characteristics means the qualities and characteristics do not diversification between different suppliers. Each firm in a perfect competition market also has selling their identical products; all the goods are perfectly the same one, so the buyer cannot distinguish whether the goods came from another firm and no firm could raise the price above the market price and still retain its sales.