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Unformatted text preview: Chapter 8 10/7/10 2:09 PM profit max condition: MR= MC at Q* o Last unit produced MR = MC 1) perfect competition many sellers identical products no barriers to entry o e.g. agricultural goods 2) Monopolistic competition many sellers different products low/no barriers to entry o e.g. restaurants, soap 3) Oligopoly few sellers unique/ different products barriers to entry o e.g. computers, automobile 4) Monopoly 1 seller unique good high barrier to entry Perfect Competition (continued) many buyers/ sellers, no influence on price (Price takers) o Identical (homogeneous) goods o No barriers to entry See graphs 8.14 2 nd graph is perfectly elastic as a price taker the firm faces a perfectly elastic demand curve at the market P at perfectly elastic demand curve: theres no incentive to increase the price because no one would buy it, and theres no incentive to decrease the price because people are already willing to buy at the price example: Craig Corn Farmer, P= $3...
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This note was uploaded on 10/03/2011 for the course ECON 2020 taught by Professor Kaplan,jul during the Spring '08 term at Colorado.
- Spring '08