Perfect Competition Chapter 7 Section 1
|
|
- Simon Greene
- 6 years ago
- Views:
Transcription
1 Perfect Competition Chapter 7 Section 1
2 Four Conditions of Perfect Perfect competition is a market structure in which a large number of firms all produce the same product. Many buyers and sellers Identical products Informed buyers and sellers Free market entry and exit Competition
3 Does this picture come close to perfect competition?
4 Many Buyers and Sellers There are many participants on both the buying and selling sides.
5 Identical Products There are no differences between the products sold by different suppliers.
6 Informed Buyers and Sellers The market provides the buyer with full information about the product and its price.
7 Free Market Entry and Exit Firms can enter the market when they can make money and leave it when they can't.
8 What prevents any one firm from raising its prices? Number of Firms: MANY Perfect Competition Variety of Goods: NONE Barriers to Entry: NONE Control Over Prices: NONE
9 Barriers To Entry Factors that make it difficult for new firms to enter a market are Start-up Costs Technology
10 Start-up Costs The expenses that a new business must pay before the first product reaches the customer are called start-up costs. Available land, labor, and capital Money for advestising
11 Technology Some markets require a high degree of technological knowhow. As a result, new entrepreneurs cannot easily enter these markets.
12 Equilibrium Quantity Price Price and Output One of the primary characteristics of perfectly competitive markets is that they are efficient. In a perfectly competitive market, price and output reach their equilibrium levels. Market Equilibrium in Perfect Competition Supply Equilibrium Price Demand Quantity
13 Equilibrium Quantity Price Price and Output What factors allow a perfectly competitive market to reach equilibrium? Market Equilibrium in Perfect Competition Supply Equilibrium Price Demand Quantity
14 Monopolies Chapter 7 Section 2
15 What Is A Monopoly? A monopoly is a market dominated by a single seller. Monopolies form when barriers prevent firms from entering a market that has a single supplier. Monopolies can take advantage of their monopoly power and charge high prices.
16 Forming A Monopoly Market conditions can cause different monopolies to be formed Economies of Scale Natural Monopoly Technology and Change
17 Economies of Scale A firm will enjoy an economies of scale if start-up costs are high average costs fall for each additional unit produced An industry that enjoys economies of scale can easily become a natural monopoly. Public water
18 Why is public water a monopoly? Number of Firms: ONE Variety of Goods: None PUBLIC WATER Barriers to Entry: Complete Control Over Prices: Complete
19 COST Describe the cost for a firm without economies of scale. AVERAGE TOTAL COST OUTPUT AVERAGE TOTAL COST WITHOUT ECONOMIES OF SCALE AVERAGE TOTAL COST WITH ECONOMIES OF SCALE
20 Natural Monopoly A natural monopoly is a market that runs most efficiently when one large firm provides all of the output. Hydroelectric plant that generates electricity from a dam on a river
21 Technology and Change Sometimes the development of a new technology can destroy a natural monopoly. It will cut fixed costs and make small companies as efficient as large firms Phone companies
22 Government Monopolies They are monopolies created by the government Technological Monopolies Franchise and Licenses Industrial Organizations
23 Technological Monopolies The government grants patents, licenses that give the inventor of a new product the exclusive right to sell it for a certain period of time. Patents on new prescription drugs
24 Franchise and Licenses A franchise is a contract that gives a single firm the right to sell its goods within an exclusive market National Parks asking Pepsi to sell within the park
25 Licenses A license is a government-issued right to operate a business Television and radio broadcasts
26 Industrial Organizations In rare cases, such as sports leagues, the government allows companies in an industry to restrict the number of firms in the market. NFL NBA NHL
27 Price discrimination is the division of customers into groups based on how much they will pay for a good. Although price discrimination is a feature of monopoly it can be practiced by any company with market power. Market power is the ability to control prices and total market output. Price Discrimination
28 Discounts Targeted discounts, like student discounts and manufacturers rebate offers, are one form of price discrimination. Price discrimination requires: some market power distinct customer groups difficult resale
29 Price Output Decisions Even a monopolist faces a limited choice it can choose to set either output or price, but not both. Monopolists will try to maximize profits Compared with a perfectly competitive market the monopolist produces fewer goods at a higher price. A monopolist sets output at a point where marginal revenue is equal to marginal cost. Setting a Price in a Monopoly Market Price $11 $3 B A Marginal Cost C Demand 9,000 Output (in doses) Marginal Revenue
30 A monopolies marginal revenue(money made from producing one more unit of a good) is lower than the market price Output must be set at a point where marginal cost equals marginal revenue In a perfectly competitive market, marginal revenue remains the same as price Output Decisions How does this affect output and price compared to a perfectly competitive market?
31 Monopolistic Competition and Oligopoly Chapter 7 Section 3
32 Four Conditions Of Monopolistic In monopolistic competition, many companies compete in an open market to sell products which are similar but not identical. 1. Many firms 2. Few artificial barriers to entry 3. Slight Control over price 4. Differentiated products Competition
33 Many Firms As a rule, monopolistically competitive markets are not marked by economies of scale or high start-up costs, allowing more firms
34 Few Artificial Barriers To Entry Firms in a monopolistically competitive market do not face high barriers to entry. Patents do not protect anyone from competition It includes many competing firms Producers have a hard time keeping out competitors
35 Slight Control Over Price Firms in a monopolistically competitive market have some freedom to raise prices Because each firm's goods are a little different from everyone else's. There is only limited control because consumers will substitute with a rival s goods
36 Differentiated Product Firms have some control over their selling price because they can differentiate Distinguish their goods from other products in the market Firms profit by selling their differences
37 When do firms in monopolistic competition have some control over prices? Number of Firms: MANY Variety of Goods: SOME Monopolistic Competition Barriers to entry: LOW Control over Prices: LITTLE
38 Nonprice Competition It is a way to attract customers through: Style Service Location but not a lower price 1. Characteristics of Goods 2. Location of Sale 3. Service Level 4. Advertising Image
39 Characteristics of Goods The simplest way for a firm to distinguish its products is to offer a new size, color, shape, texture, or taste.
40 A convenience store in the middle of the desert differentiates its product simply by selling it hundreds of miles away from the nearest competitor. Location of Sale
41 Service Level Some sellers can charge higher prices because they offer customers a higher level of service. V.S.
42 Advertising Image Firms also use advertising to create apparent differences between their own offerings and other products in the marketplace.
43 Monopolistic Prices Prices will be higher than they would be in perfect competition firms have a small amount of power to raise prices. Too much competition stops most price changes
44 Monopolistic Profits While monopolistically competitive firms can earn profits in the short run they have to work hard to keep their product distinct enough to stay ahead of their rivals.
45 Costs and Variety Monopolistically competitive firms cannot produce at the lowest price due to the number of firms in the market. They do, however, offer a wide array of goods and services to consumers.
46 Oligopoly describes a market dominated by a few large, profitable firms. Collusion Collusion is an agreement among members of an oligopoly to set prices and production levels. The outcome is called price fixing This is illegal in the U.S. Cartels A cartel is an association by producers established to coordinate prices and production. Every member has to agree to the output levels Each member has a strong incentive to break the agreement Profit motive This is illegal in the U.S.
47 Why are high barriers to entry an important part of oligopoly? Number of Firms: FEW Variety of Goods: SOME Oligopoly Barriers to entry: HIGH Control over Prices: SOME
48 How does a monopolistic competition differ from monopoly? COMPARISON OF MARKET STRUCTURES Number of Firms Variety of Goods Control over Prices Barriers to Entry Examples PERFECT ECONOMY MONOPOLISTIC COMPETITION OLIGOPOLY Many Many A Few Dominate MONOPOLY One None Some Some None None Little Some Complete None Low High Complete Wheat, Shares of Stock Jeans, Books Cars, Movie Studios Public Water
49 Regulation and Deregulation Chapter 7 Section 4
50 Market Power Markets dominated by a few large firms: tend to have higher prices lower output than markets with many sellers Controlling prices and output is known as market power
51 Predatory Pricing To control prices and output like a monopoly, firms sometimes use predatory pricing Sets the market price below cost levels for the short term Drives out competitors
52 Government and Competition Government policies keep firms from controlling the prices and supply of important goods. Antitrust (Anti-monopoly) Laws Laws that encourage competition in the marketplace. Sherman Anti-Trust Act
53 Regulating Business Practices The government has the power to regulate business practices If these practices in question give too much power to a company that already has few competitors.
54 Breaking Up Monopolies The government has used anti-trust legislation to break up existing monopolies The Standard Oil Trust John D. Rockefeller AT&T Became the Bell System Broke AT&T into several different companies
55 Blocking Mergers A merger is a combination of two or more companies into a single firm. The government can block mergers that would decrease competition.
56 Preserving Incentives In 1997, new guidelines were introduced for proposed mergers Gave companies an opportunity to show that their merging benefits consumers.
57 Deregulation is the removal of some government controls over a market. is used to promote competition Many new competitors enter a market that has been deregulated. This is followed by an economically healthy weeding out of some firms from that market Which can be hard on workers in the short term. Deregulation
58 By looking at the graph, why do you think so many banks failed after deregulation in 45% 40% 35% 30% 1980? 25% 20% Bank Failures 15% 10% 5% 0%
Perfect Competition. Chapter 7 Section Main Menu
Perfect Competition What conditions must exist for perfect competition? What are barriers to entry and how do they affect the marketplace? What are prices and output like in a perfectly competitive market?
More informationObjective: What conditions must exist for perfect competition? What are barriers to entry and how do they affect the marketplace?
Perfect Competition Objective: What conditions must exist for perfect competition? What are barriers to entry and how do they affect the marketplace? *Be sure to leave a couple blank lines under each question
More informationChapter 7 Notes 20. Chapter 7 Vocab Practice 32. Be An Entrepreneur 30. Chapter 8 Notes 20. Cooperative Business Notes 20
Name: Period: Week: 28 29 Dates: 3/2-3/16 Unit: Markets & Business Organizations Chapters: 7 8 Monday Tuesday Wednesday Thursday Friday 2 O *Chapter 7 9 E *Ch 8 *Cooperative Business Organization 3 E 4
More informationChapter 7: Market Structures
SCHS SOCIAL STUDIES What you need to know UNIT THREE 1. Describe 4 conditions that are in place for a perfectly competitive market 2. Describe and give characteristics of a monopoly 3. Describe and give
More informationChapter 7. Section 3: Monopolist Competition & Oligopoly
Chapter 7 Section 3: Monopolist Competition & Oligopoly Monopolist Competition Many companies compete in an open market to sell products that are similar but not identical Each firms hold a monopoly over
More informationChapter 7: Market Structures Section 2
Chapter 7: Market Structures Section 2 Objectives 1. Describe characteristics and give examples of a monopoly. 2. Describe how monopolies, including government monopolies, are formed. 3. Explain how a
More informationSection 1 Perfect Competition
Market Structures Section 1 Perfect Competition Perfect Competition - a market structure in which a large number of firms all produce the same product. Four Conditions for Perfect Competition 1. Many Buyers
More informationMARKET STRUCTURES. Economics Marshall High School Mr. Cline Unit Two FC
MARKET STRUCTURES Economics Marshall High School Mr. Cline Unit Two FC Price Discrimination Our previous example assumed that the monopolist must charge the same price to all consumers. But in some cases,
More informationCHAPTER 8: SECTION 1 A Perfectly Competitive Market
CHAPTER 8: SECTION 1 A Perfectly Competitive Market Four Types of Markets A market structure is the setting in which a seller finds itself. Market structures are defined by their characteristics. Those
More informationMarket Structures. Perfect competition Monopolistic Competition Oligopoly Monopoly
Market Structures The classification of market structures can be arranged along a continuum, ranging from perfect competition, the most competitive market, to monopoly, the lease competitive: Perfect competition
More information7-3: Monopolistic Competition and Oligopolies Notes
7-3: Monopolistic Competition and Oligopolies Notes Learning Target 1. I will demonstrate my understanding of the characteristics of monopolistically competitive firms and oligopolies. Monopolistic Competition
More informationEconomics Chapter 8 Competition and Markets
Economics Chapter 8 Competition and Markets CHAPTER 8: SECTION 1 - A Perfectly Competitive Market Four Types of Markets o A is the setting in which a seller finds itself. Market structures are defined
More informationMULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question.
Micro - HW 4 MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) In central Florida during the spring, strawberry growers are price takers. The reason
More informationSection I (20 questions; 1 mark each)
Foundation Course in Managerial Economics- Solution Set- 1 Final Examination Marks- 100 Section I (20 questions; 1 mark each) 1. Which of the following statements is not true? a. Societies face an important
More information7-1: PERFECT COMPETITION NOTES
7-1: PERFECT COMPETITION NOTES LEARNING TARGETS 1. I WILL DEMONSTRATE MY UNDERSTANDING OF THE CHARACTERISTICS OF PERFECT COMPETITION AND MONOPOLIES. MARKET STRUCTURES MARKET STRUCTURE: AN ECONOMIC MODEL
More informationMULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question.
Review 10-14-15 MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1. The four-firm concentration ratio equals the percentage of the value of accounted
More informationEco201 Review questions for chapters Prof. Bill Even ====QUESTIONS FOR CHAPTER 13=============================
Eco201 Review questions for chapters 13-15 Prof. Bill Even ====QUESTIONS FOR CHAPTER 13============================= 1) A monopoly has two key features, which are. A) barriers to entry and close substitutes
More informationMarket Power! Coca Cola 44%! Market power: The influence that any particular buyer or seller can exercise over the price of the product.! Nike "35%!
Market Structures Market Power Market power: The influence that any particular buyer or seller can exercise over the price of the product. Ex. These dominate in their respective markets. Coca Cola 44%
More informationMonopoly. PowerPoint Slides prepared by: Andreea CHIRITESCU Eastern Illinois University
15 Monopoly PowerPoint Slides prepared by: Andreea CHIRITESCU Eastern Illinois University 1 Market power Why Monopolies Arise Alters the relationship between a firm s costs and the selling price Monopoly
More information7.1 Perfect Competition and Monopoly Objectives
7.1 Perfect Competition and Monopoly Objectives Distinguish the features of perfect competition. Describe the barriers to entry that can create a monopoly. Compare the market structures of monopoly and
More informationChapter 7 Market Structures
Chapter 7 Market Structures Section 1 Competition 2 Perfect Competition Perfect competition is when a large number of buyers and sellers exchange identical products under five conditions. There should
More informationChapter 15 Oligopoly
Goldwasser AP Microeconomics Chapter 15 Oligopoly BEFORE YOU READ THE CHAPTER Summary This chapter explores oligopoly, a market structure characterized by a few firms producing a product that mayor may
More information13 C H A P T E R O U T L I N E
PEARSON PRINCIPLES OF MICROECONOMICS E L E V E N T H E D I T I O N CASE FAIR OSTER Prepared by: Fernando Quijano w/shelly Tefft 2of 37 PART III MARKET IMPERFECTIONS AND THE ROLE OF GOVERNMENT Monopoly
More informationiv. The monopolist will receive economic profits as long as price is greater than the average total cost
Chapter 15: Monopoly (Lecture Outline) -------------------------------------------------------------------------------------------------------------------------- Monopolies have no close competitors and,
More informationECON December 4, 2008 Exam 3
Name Portion of ID# Multiple Choice: Identify the letter of the choice that best completes the statement or answers the question. 1. A fundamental source of monopoly market power arises from a. perfectly
More informationA monopoly market structure is one characterized by a single seller of a unique product with no close substitutes.
These notes provided by Laura Lamb are intended to complement class lectures. The notes are based on chapter 12 of Microeconomics and Behaviour 2 nd Canadian Edition by Frank and Parker (2004). Chapter
More informationUnit 4: Imperfect Competition
Unit 4: Imperfect Competition 1 Monopoly 2 Characteristics of Monopolies 3 5 Characteristics of a Monopoly 1. Single Seller One Firm controls the vast majority of a market The Firm IS the Industry 2. Unique
More informationSlides and Images, Worth Publishers Inc. 8-1
Perfect Competition Michael J. Murray Slides and Images, Worth Publishers Inc. 8-1 Market Structure Analysis By observing a few industry characteristics, we can predict pricing and output behavior of the
More informationCONTENTS. Introduction to the Series. 1 Introduction to Economics 5 2 Competitive Markets, Demand and Supply Elasticities 37
CONTENTS Introduction to the Series iv 1 Introduction to Economics 5 2 Competitive Markets, Demand and Supply 17 3 Elasticities 37 4 Government Intervention in Markets 44 5 Market Failure 53 6 Costs of
More informationa. Sells a product differentiated from that of its competitors d. produces at the minimum of average total cost in the long run
I. From Seminar Slides: 3, 4, 5, 6. 3. For each of the following characteristics, say whether it describes a perfectly competitive firm (PC), a monopolistically competitive firm (MC), both, or neither.
More informationECON 202 2/13/2009. Pure Monopoly Characteristics. Chapter 22 Pure Monopoly
ECON 202 Chapter 22 Pure Monopoly Pure Monopoly Exists when a single firm is the sole producer of a product for which there are no close substitutes. There are a number of products where the producers
More informationMarket structures. Why Monopolies Arise. Why Monopolies Arise. Market power. Monopoly. Monopoly resources
Market structures Why Monopolies Arise Market power Alters the relationship between a firm s costs and the selling price Charges a price that exceeds marginal cost A high price reduces the quantity purchased
More informationCHAPTER NINE MONOPOLY
CHAPTER NINE MONOPOLY This chapter examines how a market controlled by a single producer behaves. What price will a monopolist charge for his output? How much will he produce? The basic characteristics
More informationMonopoly. While a competitive firm is a price taker, a monopoly firm is a price maker.
Monopoly Monopoly While a competitive firm is a price taker, a monopoly firm is a price maker. Monopoly A firm is considered a monopoly if... it is the sole seller of its product. its product does not
More information29/02/2016. Market structure II- Other types of imperfect competition. What Is Monopolistic Competition? OTHER TYPES OF IMPERFECT COMPETITION
Market structure II- Other types of imperfect competition OTHER TYPES OF IMPERFECT COMPETITION Characteristics of Monopolistic Competition Monopolistic competition is a market structure in which many firms
More informationMonopoly. Chapter 15
Monopoly Chapter 15 Monopoly While a competitive firm is a price taker, a monopoly firm is a price maker. Monopoly u A firm is considered a monopoly if... it is the sole seller of its product. its product
More information1. Supply and demand are the most important concepts in economics.
Page 1 1. Supply and demand are the most important concepts in economics. 2. Markets and Competition a. Def: Market is a group of buyers and sellers of a particular good or service. P. 66. b. Def: A competitive
More informationECON 102 Kagundu Final Exam (New Material) Practice Exam Solutions
www.liontutors.com ECON 102 Kagundu Final Exam (New Material) Practice Exam Solutions 1. A A large number of firms will be able to operate in the industry because you only need to produce a small amount
More informationUnit 4: Imperfect Competition
Unit 4: Imperfect Competition 1 Monopoly 2 Characteristics of Monopolies 3 5 Characteristics of a Monopoly 1. Single Seller One Firm controls the vast majority of a market The Firm IS the Industry 2. Unique
More informationMonopolistic Competition Oligopoly Duopoly Monopoly. The further right on the scale, the greater the degree of monopoly power exercised by the firm.
Oligopoly Monopolistic Competition Oligopoly Duopoly Monopoly The further right on the scale, the greater the degree of monopoly power exercised by the firm. Imperfect competition refers to those market
More informationFINALTERM EXAMINATION FALL 2006
FINALTERM EXAMINATION FALL 2006 QUESTION NO: 1 (MARKS: 1) - PLEASE CHOOSE ONE Compared to the equilibrium price and quantity sold in a competitive market, a monopolist Will charge a price and sell a quantity.
More informationUse the following to answer question 4:
Homework Chapter 11: Name: Due Date: Wednesday, December 4 at the beginning of class. Please mark your answers on a Scantron. It is late if your Scantron is not complete when I ask for it at 9:35. Get
More informationAGENDA Mon 10/12. Economics in Action Review QOD #21: Competitive Farming HW Review Pure Competition MR = MC HW: Read pp Q #7
AGENDA Mon 10/12 Economics in Action Review QOD #21: Competitive Farming HW Review Pure Competition MR = MC HW: Read pp 173-176 Q #7 QOD #21: Competitive Farming A purely competitive wheat farmer can sell
More informationEconomics 110 Final exam Practice Multiple Choice Qs Fall 2013
Final Exam Practice Multiple Choice Questions - ANSWER KEY Which of the following statements is not correct? a. Monopolistic competition is similar to monopoly because in each market structure the firm
More informationPure Monopoly. McGraw-Hill/Irwin. Copyright 2012 by The McGraw-Hill Companies, Inc. All rights reserved.
10 Pure Monopoly McGraw-Hill/Irwin Copyright 2012 by The McGraw-Hill Companies, Inc. All rights reserved. Four Market Models Characteristics of the Four Basic Market Models Characteristic Number of firms
More informationOther examples of monopoly include Australia Post.
In this session we will look at monopolies, where there is only one firm in the market with no close substitutes. For example, Microsoft first designed the operating system Windows. As a result of this
More informationMonopoly and How It Arises
Monopoly and How It Arises A monopoly is a market: That produces a good or service for which no close substitute exists In which there is one supplier that is protected from competition by a barrier preventing
More informationCOST OF PRODUCTION & THEORY OF THE FIRM
MICROECONOMICS: UNIT III COST OF PRODUCTION & THEORY OF THE FIRM One of the concepts mentioned in both Units I and II was and its components, total cost and total revenue. In this unit, costs and revenue
More informationShort run and long run price and output decisions of a monopoly firm,
1 Chapter 1-Theory of Monopoly Syllabus-Concept of imperfect competition, Short run and long run price and output decisions of a monopoly firm, Concept of a supply curve under monopoly, comparison of perfect
More informationEcon 2113: Principles of Microeconomics. Spring 2009 ECU
Econ 2113: Principles of Microeconomics Spring 2009 ECU Chapter 12 Monopoly Market Power Market power is the ability to influence the market, and in particular the market price, by influencing the total
More informationChapter 10 Lecture Notes
Chapter 10 Lecture Notes I. Pure Monopoly: An Introduction A. Definition: Pure monopoly exists when a single firm is the sole producer of a product for which there are no close substitutes. B. There are
More informationSyllabus item: 57 Weight: 3
1.5 Theory of the firm and its market structures - Monopoly Syllabus item: 57 Weight: 3 Main idea 1 Monopoly: - Only one firm producing the product (Firm = industry) - Barriers to entry or exit exists,
More information1. THE STUDENTS WILL BE ABLE TO DEFINE AND EXPLAIN WHAT PERFECT COMPETITION IS
LIGHTHOUSE CPA SOCIAL SCIENCES DEPARTMENT ECONOMICS STUDY GUIDE # 8 - MARKET STRUCTURES CHAPTER LEARNING OBJECTIVES THE STUDENTS WILL BE ABLE TO DEFINE AND EXPLAIN WHAT PERFECT COMPETITION IS THE STUDENTS
More informationMonopoly. Cost. Average total cost. Quantity of Output
While a competitive firm is a price taker, a monopoly firm is a price maker. A firm is considered a monopoly if... it is the sole seller of its product. its product does not have close substitutes. The
More informationChapter 13. Microeconomics. Monopolistic Competition: The Competitive Model in a More Realistic Setting
Microeconomics Modified by: Yun Wang Florida International University Spring, 2018 1 Chapter 13 Monopolistic Competition: The Competitive Model in a More Realistic Setting Chapter Outline 13.1 Demand and
More informationA few firms Imperfect Competition Oligopoly. Figure 8.1: Market structures
8.1 Setup Monopoly is a single firm producing a particular commodity. It can affect the market by changing the quantity; via the (inverse) demand function p (q). The tradeoff: either sell a lot cheaply,
More informationIntroduction. Learning Objectives. Learning Objectives. Economics Today Twelfth Edition. Chapter 24 Monopoly
Roger LeRoy Miller Economics Today Twelfth Edition Chapter 24 Monopoly Introduction The cement market in Mexico is dominated by a single company that accounts for more than 70 percent of all sales. Why
More informationPractice Test for Final
Name: Class: Date: Practice Test for Final True/False Indicate whether the statement is true or false. 1. A public good or service can be consumed by paying and nonpaying customers alike. 2. An example
More informationIntroduction. Learning Objectives. Learning Objectives. Economics Today Twelfth Edition. Chapter 25 Monopolistic Competition
Roger LeRoy Miller Economics Today Twelfth Edition Chapter 25 Copyright 2004 Pearson Addison Wesley. All rights reserved. Introduction Thomas Jefferson extolled the virtues of allowing individuals to pursue
More informationINTERMEDIATE MICROECONOMICS LECTURE 13 - MONOPOLISTIC COMPETITION AND OLIGOPOLY. Monopolistic Competition
13-1 INTERMEDIATE MICROECONOMICS LECTURE 13 - MONOPOLISTIC COMPETITION AND OLIGOPOLY Monopolistic Competition Pure monopoly and perfect competition are rare in the real world. Most real-world industries
More informationOligopoly. Quantity Price(per year) 0 $120 2,000 $100 4,000 $80 6,000 $60 8,000 $40 10,000 $20 12,000 $0
Oligopoly 1. Markets with only a few sellers, each offering a product similar or identical to the others, are typically referred to as a. monopoly markets. b. perfectly competitive markets. c. monopolistically
More informationMonopolistic Competition. Chapter 17
Monopolistic Competition Chapter 17 The Four Types of Market Structure Number of Firms? Many firms One firm Few firms Differentiated products Type of Products? Identical products Monopoly Oligopoly Monopolistic
More informationPractice Test for Midterm 2 Econ Fall 2009 Instructor: Soojae Moon
Practice Test for Midterm 2 Econ 2010-200 Fall 2009 Instructor: Soojae Moon Please read carefully and choose the choice that best completes the statement or answers the question. Table 7-2 This table refers
More informationYou ve gone to the emergency room with
Monopoly Objectives You may wish to call students attention to the objectives in the Section Preview. The objectives are reflected in the main headings of the section. Bellringer Ask students if they have
More informationMONOPOLISTIC COMPETITION
14 MONOPOLISTIC COMPETITION The online shoe store shoebuy.com lists athletic shooes made by 56 different producers in 40 different categories and price between$25 and $850. It offers 1,404 different types
More informationMonopolistic Competition
CHAPTER 16 Monopolistic Competition Goals in this chapter you will Examine market structures that lie between monopoly and competition Analyze competition among firms that sell differentiated products
More informationPerfect competition: occurs when none of the individual market participants (ie buyers or sellers) can influence the price of the product.
Perfect Competition In this section of work and the next one we derive the equilibrium positions of firms in order to determine whether or not it is profitable for a firm to produce and, if so, what quantities
More informationECO201: PRINCIPLES OF MICROECONOMICS FIRST MIDTERM EXAMINATION
YOUR NAME Row Number ECO201: PRINCIPLES OF MICROECONOMICS FIRST MIDTERM EXAMINATION Prof. Bill Even Novermber 12, 2014 FORM 1 Directions 1. Fill in your scantron with your unique-id and the form number
More informationECO201: PRINCIPLES OF MICROECONOMICS FIRST MIDTERM EXAMINATION
YOUR NAME Row Number ECO201: PRINCIPLES OF MICROECONOMICS FIRST MIDTERM EXAMINATION Prof. Bill Even Novermber 12, 2014 FORM 3 Directions 1. Fill in your scantron with your unique-id and the form number
More informationUnit 4: Imperfect Competition
Unit 4: Imperfect Competition 1 FOUR MARKET STRUCTURES Perfect Competition Monopolistic Competition Oligopoly Pure Monopoly Imperfect Competition Every product is sold in a market that can be considered
More informationVIII 1 TOPIC VIII: MONOPOLY AND OTHER INDUSTRY STRUCTURES. I. Monopoly - Single Firm With No Threat of Close Competition. Other Industry Structures
TOPIC VIII: MONOPOLY AND OTHER INDUSTRY STRUCTURES I. Monopoly - Single Firm With No Threat of Close Competition II. Other Industry Structures CONCEPTS AND PRINCIPLES MONOPOLY We now consider the opposite
More informationPrinciples of Microeconomics Assignment 8 (Chapter 10) Answer Sheet. Class Day/Time
1 Principles of Microeconomics Assignment 8 (Chapter 10) Answer Sheet Name Class Day/Time Questions of this homework are in the next few pages. Please find the answer of the questions and fill in the blanks
More informationEconomics. Monopoly. N. Gregory Mankiw. Premium PowerPoint Slides by Vance Ginn & Ron Cronovich C H A P T E R P R I N C I P L E S O F
C H A P T E R Monopoly Economics P R I N C I P L E S O F N. Gregory Mankiw Premium PowerPoint Slides by Vance Ginn & Ron Cronovich 2009 South-Western, a part of Cengage Learning, all rights reserved In
More informationInstructions: must Repeat this answer on lines 37, 38 and 39. Questions:
Final Exam Student Name: Microeconomics, several versions Early May, 2011 Instructions: I) On your Scantron card you must print three things: 1) Full name clearly; 2) Day and time of your section (for
More informationAP Microeconomics Chapter 11 Outline
I. Learning Objectives In this chapter students should learn: A. The characteristics of pure monopoly. B. How a pure monopoly sets its profit-maximizing output and price. C. The economic effects of monopoly.
More informationThe "competition" in monopolistically competitive markets is most likely a result of having many sellers in the market.
Chapter 16 Monopolistic Competition TRUE/FALSE 1. The "competition" in monopolistically competitive markets is most likely a result of having many sellers in the market. ANS: T 2. The "monopoly" in monopolistically
More informationMonopoly CHAPTER. Goals. Outcomes
CHAPTER 15 Monopoly Goals in this chapter you will Learn why some markets have only one seller Analyze how a monopoly determines the quantity to produce and the price to charge See how the monopoly s decisions
More informationMonopoly CHAPTER 15. Henry Demarest Lloyd. Monopoly is business at the end of its journey. Monopoly 15. McGraw-Hill/Irwin
CHAPTER 15 Monopoly Monopoly is business at the end of its journey. Henry Demarest Lloyd McGraw-Hill/Irwin Copyright 2010 by the McGraw-Hill Companies, Inc. All rights reserved. A Monopolistic Market A
More informationChapter 24. Introduction. Learning Objectives. Monopoly
Chapter 24 Monopoly Introduction States have various licensing requirements for individuals who wish to practice specific professions. For example, Ohio requires a $100 license fee to become a kick boxer.
More informationManagerial Economics Prof. Trupti Mishra S.J.M School of Management Indian Institute of Technology, Bombay. Lecture -29 Monopoly (Contd )
Managerial Economics Prof. Trupti Mishra S.J.M School of Management Indian Institute of Technology, Bombay Lecture -29 Monopoly (Contd ) In today s session, we will continue our discussion on monopoly.
More informationQOD #: 29: Graphing Practice w/ Mr. Clifford
LO1 10-1 AGENDA Thurs 10/29 Regulated Monopoly (FRQ 2011 & 2012) QOD #: 29: Graphing Practice w/ Mr. Clifford Price Discriminating Monopoly Monopolistic Competition & Oligopoly CH 8/9 Results/TC & Retakes
More informationMonopolistic Competition
Monopolistic Competition CHAPTER16 C H A P T E R C H E C K L I S T When you have completed your study of this chapter, you will be able to 1 Describe and identify monopolistic competition. 2 Explain how
More information2) All combinations of capital and labor along a given isoquant cost the same amount.
Micro Problem Set III WCC Fall 2014 A=True / B=False 15 Points 1) If MC is greater than AVC, AVC must be rising. 2) All combinations of capital and labor along a given isoquant cost the same amount. 3)
More informationChapter 6. Competition
Chapter 6 Competition Copyright 2014 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. 1-1 Chapter 6 The goal of this
More informationJANUARY EXAMINATIONS 2008
No. of Pages: (A) 9 No. of Questions: 38 EC1000A micro 2008 JANUARY EXAMINATIONS 2008 Subject Title of Paper ECONOMICS EC1000 MICROECONOMICS Time Allowed Two Hours (2 Hours) Instructions to candidates
More informationImperfect Competition (Monopoly) Chapters 15 Mankiw
Imperfect Competition (Monopoly) Chapters 15 Mankiw What did we learn one week ago? Regulated prices Effect of a ceiling price Effect of a floor price. The cost of taxes and subsidies. Tax on producers
More informationMULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question.
Exam Name MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) Which of the following statements is correct? A) Consumers have the ability to buy everything
More informationPerfect Competition Chapter 8
Perfect Competition Chapter 8 A Perfectly Competitive Market A perfectly competitive market is one in which economic forces operate unimpeded. A Perfectly Competitive Market For a market to be perfectly
More informationChapter Summary and Learning Objectives
CHAPTER 11 Firms in Perfectly Competitive Markets Chapter Summary and Learning Objectives 11.1 Perfectly Competitive Markets (pages 369 371) Explain what a perfectly competitive market is and why a perfect
More informationPractice Exam 3: S201 Walker Fall with answers to MC
Practice Exam 3: S201 Walker Fall 2007 - with answers to MC Print Your Name: I. Multiple Choice (3 points each) 1. If marginal utility is falling then A. total utility must be falling. B. marginal utility
More informationMarket Structure & Imperfect Competition
In the Name of God Sharif University of Technology Graduate School of Management and Economics Microeconomics (for MBA students) 44111 (1393-94 1 st term) - Group 2 Dr. S. Farshad Fatemi Market Structure
More informationAP Microeconomics Review With Answers
AP Microeconomics Review With Answers 1. Firm in Perfect Competition (Long-Run Equilibrium) 2. Monopoly Industry with comparison of price & output of a Perfectly Competitive Industry (which means show
More information17 REGULATION AND ANTITRUST LAW. Chapter. Key Concepts
Chapter 17 REGULATION AND ANTITRUST LAW Key Concepts Market Intervention Regulation consists of rules administered by a government agency to that determine prices, product standards and types, and conditions
More informationRefer to the information provided in Figure 12.1 below to answer the questions that follow. Figure 12.1
1) A monopoly is an industry with A) a single firm in which the entry of new firms is blocked. B) a small number of firms each large enough to impact the market price of its output. C) many firms each
More informationMarginal willingness to pay (WTP). The maximum amount a consumer will spend for an extra unit of the good.
McPeak Lecture 10 PAI 723 The competitive model. Marginal willingness to pay (WTP). The maximum amount a consumer will spend for an extra unit of the good. As we derived a demand curve for an individual
More informationPrinciples of Microeconomics Module 5.1. Understanding Profit
Principles of Microeconomics Module 5.1 Understanding Profit 180 Production Choices of Firms All firms have one goal in mind: MAX PROFITS PROFITS = TOTAL REVENUE TOTAL COST Two ways to reach this goal:
More informationINTERPRETATION. SOURCES OF MONOPOLY (Related to P-R pp )
ECO 300 Fall 2005 November 10 MONOPOLY PART 1 INTERPRETATION Literally, just one firm in an industry But interpretation depends on how you define industry General idea a group of commodities that are close
More informationAP Microeconomics Review Session #3 Key Terms & Concepts
The Firm, Profit, and the Costs of Production 1. Explicit vs. implicit costs 2. Short-run vs. long-run decisions 3. Fixed inputs vs. variable inputs 4. Short-run production measures: be able to calculate/graph
More informationMonopoly. Business Economics
Business Economics Monopoly Managerial Decisions for Firms with Market ower Monopoly Thomas & Maurice, Chapter 12 Herbert Stocker herbert.stocker@uibk.ac.at Institute of International Studies University
More information