ECO-4 Lecture Notes - Lecture 3: Demand Curve, Market Structure, Market Concentration
Document Summary
Factors that shift the ppc outward shift. Greater resources available: investment in new factories and equipment, population growth pressure on available resources. Improvements in knowledge and technology e. g. education, specialisation. Factors that shift the ppc inward shift. Low population density and geographical isolation: nepal pressure for non-specialisation and more difficult to trade. Laws and customs that limit free trade: japan: strong support for protectionism in rice production. Specialisation less variety in work boredom from job. No specialisation low wages and long hours. Market power: ability of an individual firm to influence price by altering output. Price takers: highly competitive markets sellers have little control over price and must accept market price. Price makers: as competition drops, firms have more market power and can control price by restricting output. Non-price competition: competition through methods other than price (assuming that there is not much price competition) e. g. advertising, brand names, promotions. Homogenous product: standardised and consumers regard the products as identical.
