Monopolies, markets and competition презентация

A market is a medium that allows buyers and sellers of a specific good or service to interact in order to facilitate an exchange.  What is a 'Market'

Слайд 1Monopolies, markets and competition


Слайд 2A market is a medium that allows buyers and sellers of a specific good or

service to interact in order to facilitate an exchange. 

What is a 'Market'


Слайд 3Market structure is the focus real-world competition.
Market structure refers to the

physical characteristics of the market within which firms interact.
How do firms and people buy and sell?

Market structure


Слайд 4Market structure involves the number of firms in the market and

the barriers to entry.
Monopolistic competition lie between these two extremes.

Market structure


Слайд 5Monopolistic competition is a market structure in which there are many

firms selling differentiated products.

There are few barriers to entry.

Monopolistic competition


Слайд 6Characteristics of Monopolistic Competition
Three distinguishing characteristics:
Independence because of so many

firms, each one acts independently. No firm takes into account the actions of other firms.

Lack of Collusion with so many firms it’s hard to get together and collude

Many sellers that do not take into account rivals’ reactions – each firm has a small share of the market


Слайд 7P
MC
Q
Single Monoply Firm
Short Run and Long Run in Monopolistic

Competition

QM

Pm


A

MCM

P

ATC

Q

QM

A



MC



ATC

P = ATC

Profit

Single Monopolistically Competitive Firm


Слайд 8Short-Run, Output, Price, and Profit of a Monopolistic Competitor

Like a monopoly,


At profit maximizing output, marginal cost will be less than price

Marginal revenue is below price

Like a perfect competitor, zero economic profits exist in the long run

The monopolistic competitive firm has some monopoly power so the firm faces a downward sloping demand curve


Слайд 9A Monopolistically Competitive Firm: Above Normal Profit


Слайд 10A Monopolistically Competitive Firm: Economic Loss


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