Market Structure Flashcards
What is perfect competition?
Characterized by a large number of well informed independent buyers and sellers who exchange identical products
Each produces insignificantly recent of total market supply
Theoretical
Used to evaluate other market structures
What is a necessity for perfect competition
Large number if buyers and sellers
Free to enter and conduct or get out of business
What is imperfect competition
Lack one or more of conditions of perfect competition
What is a monopolistic competition?
- Large number of completion.
- Fairly similar but not identical (mcd) -conditions are perf besides identical
- product differentiation
- real or perceived.
- non price competition: advertising giveaways
What is an oligopoly?
Market structure where few very large sellers dominate industry
What are characteristics of an oligopoly
- One seller can influence market price.
- competition is price or non price
- each is mutually independent in pricing
- significant baddies to entry
-independent behavior
What is a monopoly
One company controls industry
What does it mean to be further right on the market structure?
Less competition.
What does it mean to be further left on the market structure
More competition.
What are types of monopoly
Natural
Geographic
Technological
Governmental
What is natural monopoly
Cost of production are minimized by having a signal firm produce the project
Ex. Microsoft
What is a geographic monopoly
Absence of other sellers in certain area
What is technological monopoly
Based on ownership or control of a manufacture method, process, or other scientific advance
Ex. Copy right parents
What is governmental monopoly?
Gov’t owns and operates
Involve products that price industry can’t provide.
Ex. Water comp
