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Overall Competition Notes - Describe the Market Structure...

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Describe the Market Structure The strategies used to compete depend upon the type of market: Perfect Competition Monopolistic Competition Oligopoly Monopoly
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Characteristics of Markets Market structure is determined by: Number of firms Concentration of firms—market shares How much does the firm control? Homogeneity of product Perfect or imperfect substitutes? Ease of entry into market Market power of firms
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Market structure
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COMPETITION COMPETITION: Number and relative size of SUPPLIERS to the Market PURE MONOPOLISTIC OLI- PURE COMPETITION GOPOLY MONOPOLY More Competitive Less Competitive
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Monopolistic Competition In the short-run, monopolistic competition is similar to monopoly. Firms set MR=MC to select quantity and use the demand curve to set price. In the long-run, monopolistic competition is similar to (perfect) competition. New firms will enter the market and push down existing firms’ demand until there are no economic profits (and normal accounting profits).
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