ECN 2020 Lecture 7: SET 7
Document Summary
Set 7: perfect competition, monopolistic competition, oligopoly, monopoly. Very many firms and sellers, identical (homogenous) products, no barriers to market entry or exit, and no firm or buyer can affect the market price. ex) agriculture. Many firms, differentiated products, minor barriers to entry or exit from industry, ex) retail trade. A few number of firms, identical or differentiated products, considerable number of barriers, ex) banking. One firm, identical product, huge barriers to entry or exit industry, ex) manitoba hydro. A perfectly competitive firm, which takes the price given by the intersection of the market demand and market supply curves. It provides us with important information about how markets operate (entry, exit, costs) that can be applied to imperfect market structures, in addition to giving us a point of comparison to evaluate real-world markets. The position of the firm"s demand curve will vary with every change in the market price.
