Product Market Characteristics

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Monopoly

Complete barriers to entry by definition

Monopoly

Deadweight Loss (loss to society beyond monopoly profits and reduced consumer surplus.)

Perfect Competition

Effiecent. Each seller at cost. No rents. Only transfer earnings.(Long Run)

Oligopoly

Elasticity varies. Greater elasticity at higher prices. Lower elasticity at lower prices.

Monopoly

Empirical evidence of Long Run profits

Monopolistic Competition

Fewer sellers than perfect competition

Oligopoly

Fewer sellers who have some controll of market share; interdependence.

Oligopoly

Fewer substitutes available = market pricing power

Oligopoly

Formidable barriers to entry/exit

Monopoly

Generally inelastiv but still elastic at higher prices

Monopoly

Hetergeneous since there are no close substitutes

Monopolistic Competition

Heterogeneous products

Monopoly

High pricing power (P-MC/P)

Perfect Competition

Homogeneous products from all sellers

Perfect Competition

Ideal social pricing P=MC (Long Run)

Monopolistic Competition

Imperfect elasticity. Depends on degree of innovation.

Monopolistic Competition

Imperfect substitutions

Monopolistic Competition

Inefficient, excess capacity since P=AC (but not at minimum)

Perfect Competition

Many sellers (They are price-takers from the market)

Oligopoly

Monopoly pricing power leads to waste/inefficiency. Some economics of scale.

Monopolistic Competition

Mostly non-price competition; some independent pricing

Oligopoly

Much interdependence in pricing. Some evidence of monopoly pricing policy

Perfect Competition

No barriers to entry/exit

Monopoly

No close substitutes

Perfect Competition

No pricing policy or strategy. Price at market price, price-takers

Perfect Competition

One product type available (fully substitutable) available from all sellers

Monopoly

One seller for whom there is no close substitutes.

Monopolisitc Competition

P=AC; tendency for Long Run zero economic profits

Perfect Competition

P=MR (Long Run)

Monopolistic Competition

P>MC

Monopoly

P>MC

Oligopoly

P>MC

Monopolistic Competition

P>MR

Monopoly

P>MR

Oligopoly

P>MR

Perfect Competition

Perfectly Elastic

Oligopoly

Some markets- homogenous for speciality items. Other markets heterogeneous products.

Oligopoly

Tendency for existence of Long Run economic profits.

Monopolistic Competition

Weak barriers to entry/exit

Perfect Competition

Zero economic profit. Price=Minimum AC (Long Run)


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