ECON 101 Lecture Notes - Lecture 14: Market Power, Perfect Competition, Production Function
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ECON 101 Full Course Notes
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Chapter 13: how firms behave in competitive markets. The goal of any firm is to maximize its profit, but its decisions depend on what kind of market in which they operate. Perfectly competitive market assumptions: individual buyers and sellers are too plentiful and small to affect the market. When a firm is a price taker, it decides how much to produce at that market price. Monopolistic competition there are many firms that sell similar, but not identical products. Oligopoly there are only a few firms, some of which are large enough relative to the size of the market to affect the market price. Monopoly there is only a single firm that is the sole supplier of a product for which there are no close substitutes. The demand curve for a perfectly competitive firm faces. Can sell as much or as little as it wants at the market price.
