Week 6_imperfect competition

Week 6_imperfect competition - Department of Food and...

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LESE204 Department of Food and Resource Economics Announcement Group project - 13 groups, 6 students in each group - Each group is supposed to choose one topic - Due date of the submission of report: Jun 12 th - Presentations: At the last week of this semester Details are posted at EKU
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LESE204 Department of Food and Resource Economics Definition of food marketing Characteristics of food markets Understanding the market - Basic principles of supply and demand - Relationship between the markets of agricultural products and manufactured food - Mastering demand - Impacts of the shifts in supply and demand - Imperfect competition Marketing System: food suppliers, marketing firms Marketing Channel Marketing Strategies
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LESE204 Department of Food and Resource Economics Imperfect competition
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LESE204 Department of Food and Resource Economics 4. Oligopoly Oligopoly - Only a few firms supply the products to the market. - Firms get excess profits because - Firms produce either differentiated or homogeneous products. - Examples: automobiles, steel, electrical equipment, and computer etc. - Firms’ decisions about production or pricing affect one another. Strategic interaction Your decision impacts the profits of your rivals The decision of your rivals impacts your profits
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LESE204 Department of Food and Resource Economics 4. Oligoploy Q D’’ when competitor holds the price constant P 2 D’: when competitor corresponds to the change in your price P 1 P 0 Q 0 Q’’ 1 Q’ 1 Q’ 2 Q’’ 2 Example
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LESE204 Department of Food and Resource Economics 4. Oligopoly Q D’’ when competitor holds the price constant P 2 D’: when competitor corresponds to the change in your price P 1 P 0 Q 0 Q’’ 1 Q’ 1 Q’ 2 Q’’ 2 Kinked demand: when competitor only corresponds to the reduction of your price
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LESE204 Department of Food and Resource Economics 4. Oligopoly Q D’’ when competitor holds the price constant D’: when competitor corresponds to the change in your price P 0 Q 0 Kinked demand: when competitor only responds to the reduction of your price MR’’ MR’ MC 1 MC 2 MC 3 Rigidity in price
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Week 6_imperfect competition - Department of Food and...

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