E303lect36F09 - 25 November 2009 Reading Ch 8 p...

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25 November 2009 Reading: Ch. 8 p. 265-277 (Monday) Collect Problem Set #12 Problem Set #13 Posted. Due Wednesday Problem Set #14 Posted. Due Friday Lecture 36 REVIEW___________________________________________________: V. Chapter 6. The Organization of the Firm. Ch. (6.) B. Getting the Most out of Human Inputs Preview__________________________________________________________ VI. Chapter 7. The Nature of Industry (Introduction) A. Market Structure a. Definition b. Types of Structures i. Competition ii. Monopoly iii. Monopolistic Competition iv. Oligopoly B. The Problem for Businessmen: Find a market corner it, then protect your turf. VI. Chapter 8. Managing in Competitive, Monopolistic, and Monopolistically Competitive Markets. A. Introduction B. Perfect Competition a. Short Run b. Intermediate Run c. Long Run Lecture _______ __________________________________________________. VI. Chapter 7. The Nature of Industry (Brief Review). To date, we have considered in some detail demand considerations for a firm, and then a variety of cost considerations for a firm. Our next project is to use these tools to talk about the optimal behavior of firms in the market. These decisions are affected importantly by the structure of the industry in which a firm competes. Chaper 7 overviews some of the candidate structures. A. Some terminology 1. Market Structure Refers to the number of competitors in an industry, the relative size of the firms, as well as demand conditions and entry and exit requirements. When a market has very few players, it is said to be concentrated.
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a. Market definition. When attempting to characterize the structure of a particular industry, it is critically important to pay attention to the appropriate market definition . A market is defined as a collection of products/geographic areas where cross-elasticities of demand and supply are sufficiently high so that unilateral price changes by one producer causes enough of a response to make the action unprofitable.
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E303lect36F09 - 25 November 2009 Reading Ch 8 p...

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