| Course | ECON 1002 Microeconomics |
|---|---|
| Week | Week 8 |
| Paper type | Market structure brief |
| Length | About 590 words, 5 pages |
| Format | APA 7 student paper |
| School | Walden University |
| Program | BS in Business Administration |
| Updated | October 2026 |
Free sample paper for ECON 1002 Week 8
Which Market Structure Fits Short-Term Rentals in Port Ellery? Testing the Trade Against Perfect Competition, Monopolistic Competition, Oligopoly and Monopoly, and a Two-Part Verdict
Student Name
Walden University
ECON 1002: Microeconomics
Instructor Name
Month Day, Year
Which Market Structure Fits Short-Term Rentals in Port Ellery? Testing the Trade Against Perfect Competition, Monopolistic Competition, Oligopoly and Monopoly, and a Two-Part Verdict
The Industry
Port Ellery, a composite riverside city, has about 640 hosts offering short-term stays in apartments and houses. Most list one or two units; a few property managers list ten or more. No two units are the same: they differ by neighborhood, size, view, parking and how close they are to the river. Almost every booking is made through one of two national listing platforms, which charge hosts and guests service fees. Since the city's primary-residence rule, a new host must live in the unit, but otherwise starting is easy: photograph the apartment, create a listing and accept a booking.
Testing the Four Structures
Table 1
Port Ellery Short-Term Rentals Against Four Market Structures
| Structure | Number of sellers | How alike the product is | Ease of entry | Fit for the hosts | |
|---|---|---|---|---|
| Perfect competition | Very many | Identical | Free | Fails: no two units are identical | |
| Monopolistic competition | Many | Differentiated | Easy | Fits | |
| Oligopoly | Few | Identical or differentiated | Difficult | Fails for hosts; fits the platforms | |
| Monopoly | One | Unique, no close substitute | Blocked | Fails: hundreds of hosts | |
Structures as defined in the course text; industry figures are illustrative.
Why Monopolistic Competition Fits the Hosts
Perfect competition requires identical products, so that no seller can charge more than the market price without losing every customer. Hosts in Port Ellery can: a riverfront apartment with parking commands a higher rate than a basement studio across town, and it still books. Monopoly fails on numbers alone. Oligopoly fails for hosts because there are hundreds of them and none is large enough that its pricing forces others to respond.
Monopolistic competition fits: many sellers, each offering a product that is somewhat different, with easy entry (Greenlaw et al., 2022). The model makes three predictions that match what is observed. First, each host has some control over price, because a unit's location and features make it a partial substitute for others rather than a perfect one. Second, hosts compete through differentiation rather than price alone: better photographs, guest reviews, flexible check-in and small extras such as coffee and bicycles. Third, any profit above normal will attract entry, as residents see neighbors earning from a spare room and list their own, which erodes profits over time (Mankiw, 2021).
The Platform Layer
The hosts do not operate alone. Nearly all of them reach guests through two platforms, and that layer has a different structure. Two large firms, high barriers to entry because guests go where the listings are and hosts go where the guests are, and each firm's fee decisions watched closely by the other: this is an oligopoly. Platforms that serve two groups at once, here hosts and guests, set prices for each side with the other in mind, which is why fee structures can look lopsided (Rochet & Tirole, 2003). The platforms' position gives them power over the fees both hosts and guests pay, and over the rules that decide which listings appear first in a search.
Verdict
Short-term rentals in Port Ellery are best described as monopolistic competition among hosts, reached through an oligopoly of listing platforms. The distinction matters. Predictions about nightly rates and the effect of new hosts should use the monopolistic competition model; predictions about the fees guests pay and the share of each booking hosts keep should use the oligopoly model. A study that treated the whole trade as one structure would get one of these wrong.
References
Greenlaw, S. A., Shapiro, D., & MacDonald, D. (2022). Principles of microeconomics (3rd ed.). OpenStax. https://openstax.org/details/books/principles-microeconomics-3e
Mankiw, N. G. (2021). Principles of microeconomics (9th ed.). Cengage Learning.
Rochet, J.-C., & Tirole, J. (2003). Platform competition in two-sided markets. Journal of the European Economic Association, 1(4), 990-1029. https://doi.org/10.1162/154247603322493212
ECON 1002 Week 8 instructions, in plain terms
In Week 8 you analyze an industry and argue which market structure fits it. Describe the industry by the features the models depend on: the number of sellers, how similar their products are and how easy it is to enter. Test it against perfect competition, monopolistic competition, oligopoly and monopoly, rejecting each misfit on a specific feature. Explain what the best-fitting model predicts and check those predictions against what the industry actually does. If different parts of the industry fit different models, say so. A table comparing the structures is helpful. Close with a clear verdict.
Inside the ECON 1002 Week 8 example
The brief describes about 640 hosts, mostly with one or two units, differing by location and features, and two national platforms handling nearly all bookings. A four-row table rates each structure on sellers, product and entry. The text rejects perfect competition because hosts can charge more for better units, monopoly because there are hundreds of hosts and oligopoly for hosts because none is large. Monopolistic competition fits, citing OpenStax, and the brief checks three predictions: some price control, competition through differentiation and entry that erodes profit, citing Mankiw. The platform section identifies two firms with high barriers as an oligopoly. The verdict explains why the distinction matters.
Reading the ECON 1002 Week 8 rubric
Market structure briefs are judged on how well the student tests the industry against each model. The description must give the features the models depend on; a vague description makes any conclusion arbitrary. Each rejected model should be dismissed on a specific failing feature. The chosen model should be supported by checking its predictions against observed behavior, not just by matching definitions. Recognizing that an industry can have layers with different structures shows sophistication. The verdict should be clear and connected to what the structure predicts. Tables should be consistent with the text, and illustrative figures labeled.
Common ECON 1002 Week 8 mistakes, and how to avoid them
List the industry's sellers, describe how their products differ and note what it takes to start one. Then go down the four models: which feature rules each one out? The model left standing is your candidate. Test it by asking what it predicts, such as how firms compete or what happens to profits over time, and whether that is what you observe. Look for a layer of the industry that works differently, such as suppliers or platforms. Weak briefs choose a model from one feature or never check predictions. If you have an industry in mind, tell us and we can map it against the four models with you. Remember that real industries rarely match a textbook model perfectly; the task is to find the best fit and say plainly where it is imperfect. A two-part answer is acceptable when the industry has two layers.
Get a ECON 1002 Week 8 example written to your instructions
Forward the brief's prompt, the rubric and the industry your section describes, and the four structures are tested against that industry, delivered in 24 to 48 hours with the first one free. Neither the hosts nor the two platforms correspond to any company, and the city is a teaching composite.
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ECON 1002 Week 8 questions, answered
Where can I find a free ECON 1002 Week 8 sample paper?
The full Port Ellery brief and its comparison table are available here, nothing to pay.
Which market structure fits the hosts in the ECON 1002 Week 8 brief?
Monopolistic competition: many hosts, each unit somewhat different and easy entry.
Why is it not perfect competition?
No two units are identical, so a host with a better location can charge more and still get bookings.
How do the listing platforms fit?
As an oligopoly: two large firms, high barriers to entry and fee decisions each watches the other make.
Why does the two-part verdict matter?
Nightly rates and entry are best predicted by monopolistic competition, while fees and the hosts' share of each booking follow the oligopoly model.