16633 Chapter Notes - Chapter 7: Perfect Competition, Market Power, Market Structure
Document Summary
Economics for today perfect competition chapter 7. Key points: market structures, characteristics of perfect competition, perfectly competitive firm as a price taker, profit maximisation condition, short run profit and losses, shutdown rule, long run equilibrium, three types of long-run supply curves. Market structures: market structure classifies some of the key traits of a market, including: The ease of entry into and exit from the market: this chapter is concerned with how the perfectly competitive market determines prices, output and profits. Very easy entry into or exit from the market by firms. Homogeneous product: homogeneous products mean products from one firm cannot be distinguished from another, buyers are indifferent as to whose product they buy, goods or services of all the firms are identical. Is this a real-world" market: no real-world market exactly fits the perfect competition assumptions, but some markets do approximate the model fairly closely. Examples: farm product markets, the interstate road transport market, lawn-mowing or cleaning markets.
