From what I have learned in ESS(Environmental system and society), a model is a simplified representation of reality. Economics simplifies real-world economic events into diagrams and frameworks—such as the market structures we studied this week—to help consumers and firms make more informed decisions. By breaking down complex interactions into understandable elements like supply, demand, competition, and pricing behavior, these models allow us to analyze how different market conditions affect outcomes. For example, understanding the differences between perfect competition, monopoly, and oligopoly helps companies formulate pricing strategies, while also enabling consumers to recognize market behaviors and make better choices. In this way, economic models serve as practical tools that bridge theory and real-life application.
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