Ch. 9 Outline - ECON 1B Chapter 9 - Price Takers and the...

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ECON 1B Chapter 9 — Price Takers and the Competitive Process Thou shalt not covet; but tradition Approves all forms of competition Arthur Hugh Clough (1819-1861) A. Market Structure: How we define the degree of competition 1. 2. B. Market Structure Continuum: Perfect Monopolistic Oligopoly/ Perfect Competition Competition Duopoly Monopoly 1. Location on continuum matters: a. Firm’s behavior— b. Market outcome— C. Common to all market structures: 1. Firm’s goal 2. Market demand and individual firm demand curves 3. Market supply and individual firm supply curves 4. Market demand and market supply 5. Price and Average Revenue D. Unique to the Perfect Competition Market Structure: 1. “Many” buyers and sellers —will get to this in a moment. 2. Homogeneous product —doesn’t matter who you buy from 3. Perfect information 4. No barriers to firms entering or exiting the market (a long run concern) a. b. E. Examples of markets that fit this description fairly well: a. b. F. Characteristics of an individual firm in perfect competition 1.Revenue Side: a. The firm is a price taker b. example
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ECON 1B—Chapter 9—Price Takers and the Competitive Process—p.2 c.
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Ch. 9 Outline - ECON 1B Chapter 9 - Price Takers and the...

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