ECON 101 Chapter Notes - Chapter 11: Imperfect Competition, Monopolistic Competition, Market Power
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ECON 101 Full Course Notes
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Industries with many small firms: individual firms produce more-or-less identical products and so are price taker (forest and fish products) Monopolistic competition, developed to help explain economic behaviour and outcomes in industries in which there are many small firms, each with some market power. Industries with a few large firms: electric utilities which are typically owned by provincial, very large firms with market power governments. Industrial concentration: industry with a small number of relatively large firms is said to be highly concentrated. Shows the fraction of total market sales controlled by the: concentrated ratios largest sellers, defining the market. Presence of only a single firm in one industry in canada in no way implies monopoly power when it is in competition with several foreign firms that can easily sell in the. There is a large number of small firms, but the theory of perfect competition is not appropriate because each of the many firms has some market power.