CAS EC 101 Lecture Notes - Lecture 22: Monopoly Price, Perfect Competition, Takers
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25 Oct 2018
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If market is in perfect competition, then firms are price takers, which means that they take the market price and have to produce at that cost. Examples: tap water, cable tv, pc operating system (microsoft) There must be a reason why no other firms can enter the market and the one firm stays the sole seller of the good or service. The government gives a firm the right to be the legal provider of a good or service. Only a certain company who owns the copyright of a product is legally allowed to reproduce the product, therefore, other firms will not be able to enter the market. Sole ownership or control of a scarce resource. Like social media platforms: like if you were the only one on it, it won"t be useful. The more people who use the service or product, the more valuable it is. Examples: auction sites- like ebay and computer operating systems- like windows.
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