Economic Concepts

Question 1

Perfect/Pure Competion

Monopolistic Competition

Oligopoly

Monopoly

Answer 1

No single firm can influence the mkt price nor shift the mkt supply enuf to make a good scarcer or more abundant.

Many sellers compete to sell a differentiated product in a mkt into which the entry of new sellers is possible. (ex-cosmetics)

A few sellers dominate the sale of a product and entry of a new seller is difficult or impossible.(ex-big 3 auto mfgers.)

Concentration of supply in the hands of a single firm (ex. - Utility Co.)

Question 2

Strategy of Perfect Pure Competition

Strategy of Monopolistic Competition

Strategy of Oligopoly

Monopoly

Answer 2

Maintain the mkt share & responsiveness of sales price to market conditions.

Maintain the mkt share, enhance product differentiation, extensive adv., mkting & research.

Focus on mkt share thru proper amt of adv. (to insure product differentiation, and adapt to price changes and required changes in production volume.

Disregard mkt share and focus on profitability thru production levels that maximize profits.