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001_class9 - Econ 1 section 9 Corey Garriott...

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Unformatted text preview: Econ 1 section 9 Corey Garriott (cgarriott@ucla.edu) Mar. 9, 2008 1 Definitions Market structure : The state of a market with respect to competition. Pure competition Monopolistic competition Oligopoly Monopoly Number Immeasurable More than seven or so Two to seven One Product differentiation Perf. substitutes Impf. substitutes Impf. substitutes One Control over price None Limited Strategic Absolute Conditions of entry Free entry Free or difficult Difficult Hard! Strategic interaction None (price taking) Signals of quality Like a board game N/A Examples Agriculture Retail Cars Utilities 2 Optimality for a monopolistic competitor (or monopolist) 2.1 MC = MR still Same idea as before. Firm produces more until the next marginal unit would bring in less revenue than it would cost. Only difference is MR 6 = Demand because demand has a slope. The market exhibits diminishing marginal demand, so the more product produced, the lower its marginal return....
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001_class9 - Econ 1 section 9 Corey Garriott...

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