ECON 208 Chapter Notes - Chapter 11: Perfect Competition, Marginal Cost, Hinder

• School: McGill University
• Department: Economics
• Course: ECON 208
• Professor: El- Attar Mayssun

Document Summary

Most firms aren"t perfectly competitive or monopolistic: called imperfectly competitive. Between the two extremes: industries with many small firms. Many small firms with some degree of marketing power: industries with a few large firms. I. e. provincial hydro electricity or communication, grocery business. Industrial concentration: industry with small number of relatively large firms is said to be highly concentrated. Industry can have 1 big one and a bunch of tiny ones and be more concentrated than 5 big ones. Instead compare total market sales: defining market. Defining imperfect competition: firms choose their products. Differentiated product: a group of products similar enough to be called same product but dissimilar enough that they aren"t sold at same price (i. e. smartphones) Firm chooses its characteristic: firms choose their prices. Firms set prices and then let demand determine sales. Not set like in perfect competition: non-price competition. Much spent on advertising which isn"t done in pc or monopoly.