NUTR 430 Chapter Notes - Chapter 16: Market Power, Oligopoly, Perfect Competition
Document Summary
Firms have considerable market power but faces some competition. A market structure in which only a few sellers offer similar or identical products. Will usually have a four-firm concentration ratio < 50% Measuring a market"s domination by a small number of firms. Departs from perfect competition fewer firms = less competition. A market structure in which many firms sell products that are similar but not identical. Each firm has monopoly over the product it makes, but other firms produce similar products. The firms on the market compete for the same customers. Departs from perfect competition product differentiation. Many sellers many firms competing for same group of customers. Product differentiation products offered by each firm differ slightly; sellers are not price-takers d curve is downward sloping. Free entry and exit firms can come and go w/out restriction; # firms in the market is adjusted until economic profits = zero (e. g. ) books, dvds, computer games, restaurants, cookies, clothing, etc.
