2-7-19 - ● 2.7 Competition and Market Structures ○...

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2.7 Competition and Market Structures Laissez-Faire, an economic theory developed in 1776, by Adam Smith. States that governments should not interfere with commerce or trade The role of government is confined to protecting private property, enforcing contracts, settling despite’s, and protect businesses from foreign competition When economists classify individual markets today they evaluate the market structure, or the nature and degree of competition among firms operating in the same industry. There are 4 different market structures: perfect competition, monopolistic competition, oligopoly, monopoly Perfect Competition Perfect competition is characterized by large number is well-informed independent sellers who sell identical products to many buyers. Types of Monopolies Natural Monopoly Costs of production are minimized by having a single firm produce the
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