Class03_17

Class03_17 - 17/03/2008 Class Notes (cover part of Chapter...

Info iconThis preview shows pages 1–3. Sign up to view the full content.

View Full Document Right Arrow Icon
17/03/2008 Class Notes (cover part of Chapter 10 in the textbook) Class Outline Markets and the competitive environment Perfect Competition Markets and the competitive environment Economists identify four types of industries: 1. Perfect Competition 2. Monopolistic Competition 3. Oligopoly 4. Monopoly Measures of Industry Concentration 1. Four-Firm Concentration Ratio (CR): percentage of the value of sales accounted for by the four largest firms in an industry. The greater the CR the more concentrated the industry is. Let’s see some examples! Degree of competition (Low to High) Monopoly Oligopoly Monopolistic competition Perfect competition 1
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Examples : Table 1. Percentage of sales by firm, Industry 1 F1 F2 F3 F4 F5 F6 F7 F8 20% 20% 20% 20% 5% 5% 5% 5% In this example the largest four firms account for 80% of the market sales CR=80 Table 2. Percentage of sales by firm, Industry 2 F1 F2 F3 F4 F5 F6 F7 F8 30% 30% 10% 10% 5% 5% 5% 5% Also in this example the largest four firms account for 80% of the
Background image of page 2
Image of page 3
This is the end of the preview. Sign up to access the rest of the document.

Page1 / 6

Class03_17 - 17/03/2008 Class Notes (cover part of Chapter...

This preview shows document pages 1 - 3. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online