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8 Cards in this Set
- Front
- Back
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4 market types
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-Pure competition
-Pure Monopoly -Oligopoly -Monopolistic competition |
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Pure competition
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-many businesses competing
-homogeneous product -no control over price (price taker) -Easy entry -no non-price competition -Example: agriculture |
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Total revenue vs total cost approach
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-firm can only change output
-if Total revenue is greater than Total cost the firm should produce the product |
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Marginal revenue vs marginal cost
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MR=MC rule : a firm should produce units up to the point where MR>MC
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Pure Monopoly
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one producer
homogeneous or standardized product Impossible or very difficult no price competition very little non price price makers |
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problems with advertising
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impulse purchases
can you believe ad? |
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monopolistic
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many firms
differentiated easy entry price control much non price competition Example: retail |
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Oligopoly
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few firms
differentiated or standardized price competition( price leadership and collusion) non price competition difficult entry |
