Market Structures Project

Market Structures Project

Introduction

“The Grapes of Wrath” is a novel written by John Steinbeck that enlightens the tale of sharecroppers' family by economic adversities stemming from the shift of industry from manual to mechanized labor. This novel was published in 1939, during the times of Great Depression, and anticipated that the underlying factor of capitalism would spread an unmanageable division of classes and thereby will ultimately result in a revolution, which is regarded by many economists as a call to socialism (Maass, 2010). However, in reality this may not be the formal call to Socialism as several at that time claimed; it definitely provides the negative impacts of every Capitalistic Model. The market structure overview by Steinbeck of Monopoly, Pure Competition, Monopolistic Capitalism, Oligopoly, and Monopsony highlights the intrinsic issues of each of these market structures and his concerns for the world' future through the eyes of a common man.

Discussion

Oligopoly

The market structure of Oligopoly is the one in which there is a small number of sellers that control the market. In the book (The Grapes of Wrath), the most dishonorable people were the salesmen of used cars. They made revenues from the migrants by selling them beat down vehicles they buy for 30 dollars and then resell them for at least 75 dollars to the customers in need (Steinbeck, 2001). So, the effect to the parties involved in oligopoly market structure is prominent. As there were fewer sellers that controlled the whole market, they maximized their profits nefariously by pushing the prices for used cars (see graph given below).

In this story, the used car salesmen cheat the departing families. As the great westward migration of tenants results in increasing the demand for vehicles, and thereby the dusty used-car lots hugely demanded throughout the area, crooked salesmen sell the migrating families at higher prices for whatever broken-down automobiles they can find. In addition to higher prices, the salesmen fill engines with sawdust to hide noisy transmissions and replace good batteries with cracked ones prior to delivering the vehicles. On the other hand, the farmers desperate to migrate from the place and having no sound knowledge of automobiles pay the skyrocketing prices of cars, much to the delight of salesmen. Thus, this story articulates a clear example of oligopoly market structure, since this type of market involves few companies that dominate the market and the consumers have imperfect knowledge regarding price and availability (Ghai & Gupta, 2002). There are just few salesmen of used cars in the market, and therefore they increased the prices, and the consumers i.e. farmers do not have sound knowledge of the vehicles, hence clearly representing the example of an oligopoly market. As the prices are skyrocketing, this type of market provides great benefits to the producers but hurts the economic welfare of consumers.

Monopoly

The brief narrative of the story Steinbeck related with the market structure of Monopoly can be analyzed from chapter 9 of the book. Recapping on the novel, the farmers had a coarse ...