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jekas [21]
3 years ago
7

3. Name two different market structures. Describe how and why they each have a different competitive situation.

Business
1 answer:
xz_007 [3.2K]3 years ago
7 0
Market structure is defined with characteristics of the market and there are four different market structures: perfect competition, oligopoly, monopoly and contestable market. 
<span>Perfect competition is a market structure in which there is a large number of small firms who produce identical goods otherwise known as homogenous goods and it has a lot of buyers. The competition between these firms is huge, because they are many firms and each of them wants to attract more buyers.</span>
Oligopoly is a market structure in which there is a small amount of large firms, for example the supermarket industry. There are not so many buyers as in the perfect competition, but buyers can still choose from which supermarket, for example, they will buy. So there is a competition between the firms.
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Answer:

If the bond is zero coupon then there only be one lump sum payment at the end of the bond period and we will have to discount is back using the yield of the  bond to find its present value or price. Because the convention is semi annual we will divide interest by 2 to find the semi annual interest rate and to number of periods we will multiply years by 2 because of semi annual convention.

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We have to discount 1,000 20 years back which means 40 periods back as 20*2= 40

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b. the maturity is 30 years

We have to discount 1,000 30 years back which means 60 periods back as 30*2= 60

1000/1.035^60=126.93

The present value of a zero coupon $1000 bond will be 126.93 when the yield is 7% and maturity is 30 years.

c. the maturity is 50 years

We have to discount 1,000 50 years back which means 100 periods back as 50*2= 100

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The present value of a zero coupon $1000 bond will be $32.06 when the yield is 7% and maturity is 50 years.

d. the maturity is 100 years

We have to discount 1,000 100 years back which means 200 periods back as 50*2= 200

1000/1.035^200= 1.02

The present value of a zero coupon $1000 bond will be $1.02 when the yield is 7% and maturity is 100 years.

Explanation:

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