Perfect Competition, ch. 10 - Perfect Competition, ch. 10...

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Perfect Competition, ch. 10 I. Markets and competitive Environment 1. Perfect competition a. Many firms, each selling identical product, many buyers and no restrictions on entry of new firms in industry b. Ex. Corn, rice and grain crops 2. Monopolistic competition a. Market structure which large number of firms compete by making similar buy slightly different products b. Product differentiation i. Making product slightly different from competing product c. Ex. Brands of aspirin 3. Oligopoly a. Market structure which small number of firms compete b. Ex. Computer software, airplane manufacture 4. Monopoly a. One firm, which produces g/s that has no close substitute b. Ex. In places, phone and water b. Measures of Concentration i. Four-Firm concentration Ratio 1. Percentage of value of sales accounted for by four largest firms in industry 2. Monopoly has 100% concentration 3. Low concentration ratio indicates high degree of competition 4. High concentration ratio indicates absence of competition
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This note was uploaded on 05/06/2009 for the course MGMT 25100 taught by Professor Blanchard during the Spring '09 term at Purdue University-West Lafayette.

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Perfect Competition, ch. 10 - Perfect Competition, ch. 10...

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