hw ch 10 1-8

hw ch 10 1-8 - Econ 203 TA: Ergin Bayrak November 5, 2005...

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Econ 203 TA: Ergin Bayrak November 5, 2005 Chapter 10 Homework #1-8 1. Pure Competition : involves a very large number of firms producing a standardized identical product; new firms can enter and exit easily. Pure Monopoly : involves one sole seller of a product or service; entry and exit is blocked because one firm constitutes the entire industry. Monopolistic Competition : involves relatively large number of sellers producing differentiated products where there is nonprice competition; entry and exit is easy. Oligopoly : involves a few firms producing a standardized or differentiated product where each firm is affected by the decisions on other firms and must take that into account when determining its own price and output. a. Supermarket: oligopoly b. Steel industry: oligopoly c. A Kansas wheat farm: pure competition d. Commercial bank where you have an account: monopolistic competition e. Automobile industry: oligopoly 2. Pure competition has never existed and probably never will. a. A few industries are more closely approximate pure competition than any other market structure. b. We can learn about markets for agricultural goods, fish products, foreign exchange, basic metals and stock shares. c. Meaningful starting point for any discussion of price and output determination. d.
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hw ch 10 1-8 - Econ 203 TA: Ergin Bayrak November 5, 2005...

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