Econ Chapter 7 Notes Flashcards
What are Market Structures?
Deals with the amount of competition businesses face in the same industry
What are the Two Types of Market Structures?
Perfect Competition
Imperfect Competition
What are the characteristics of Perfect Competition?
- Large number of buyers and sellers. No one buyer and seller can affect prices
- Identical products (ex: hamburgers)
- Buyers and Sellers act independently
- Adequate information
- Freedom to enter, conduct business, leave market
What is Imperfect Competition?
Lacks one or more characteristics of perfect competition
What are the Three Types of Imperfect Competition?
- Monopolistic Competition
- Oligopoly
- Monopoly
What is Monopolistic Competition?
has all conditions of perfect competition except identical products (ex: designer clothing)
What is an Oligopoly?
Very few sellers dominate the industry (ex: oil companies)
What is a Monopoly?
One seller of a particular product
What are the Four types of Monopoly?
- Natural
- Geographic
- Technological
- Government
What is a Natural Monopoly?
minimizes costs (ex: public utilities)
What is a Geographic Monopoly
Based on absence of other sellers in the area
What is a Technological Monopoly?
Based on ownership or control of production process, other scientific advancement (Ex: drug companies)
What is a Government Monopoly?
Owned and operated by a government (Ex: water company)
