Ch09_Market_structure_and_imperfect_competition

Ch09_Market_structure_and_imperfect_competition - Chapter 9...

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Chapter 9 Market structure and imperfect competition David Begg, Stanley Fischer and Rudiger Dornbusch, Economics , 6th Edition, McGraw-Hill, 2000 Power Point presentation by Peter Smith
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10.2 Most markets fall between the two extremes of monopoly and perfect competition An imperfectly competitive firm would like to sell more at the going price faces a downward-sloping demand curve recognises its output price depends on the quantity of goods produced and sold
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10.3 Imperfect competition An oligopoly an industry with a few producers each recognizing that its own price depends both on its own actions and those of its rivals. In an industry with monopolistic competition there are many sellers producing products that are close substitutes for one another each firm has only limited ability to influence its output price.
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10.4 Market structure Number of firms Ability to affect price Entry barriers Example Perfect competition Imperfect competition: Monopolistic competition Oligopoly Monopoly Many Many Few One Nil Small Medium Large None None Some Huge Fruit stall Corner shop Cars Post Office
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The minimum efficient scale and market demand The minimum efficient scale (mes) is the output at which a firm’s long-run average cost curve stops falling. The size of the mes relative to market demand
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Ch09_Market_structure_and_imperfect_competition - Chapter 9...

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