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36 Cards in this Set
- Front
- Back
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Aspects of market structure
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1. Number of firms
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2. Products degree of differentiation
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3. The ease of entry into the market
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4. Forms of competition among firms
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5. Long-run economic profit potential
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6. Efficiency
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Perfectly competitive
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1. Number of firms:
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Many
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2. Products degree of differentiation:
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Identical products
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3. Ease of entry into the market:
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Easy
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4. Forms of competition among firms:
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Price
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5. Long-run economic profit potential:
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No long run economic profit
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6. Efficiency:
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Allocative & productive
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Monopolistic Competition
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1. Number of firms:
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Many
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2. Products degree of differentiation:
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Different
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3. Ease of entry into the market:
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Easy
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4. Forms of competition among firms:
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Price and non price
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5. Long-run economic profit potential:
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No long run economic profit
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6. Efficiency:
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Does not achieve productive or allocative
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Oligopoly
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1. Number of firms:
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Few dominant firms
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2. Products degree of differentiation:
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Identical or differentiated products
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3. Ease of entry into the market:
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Very difficult (both natural and artificial barriers)
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4. Forms of competition among firms:
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Price and non price
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5. Long-run economic profit potential:
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Any outcome is possible
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6. Efficiency:
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Does not achieve productive or allocative
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Fact: Firms are interdependent
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They look to other firms to make decisions
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Monopoly
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1. Number of firms:
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One
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2. Products degree of differentiation:
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Unique
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3. Ease of entry into the market:
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Blocked
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4. Forms of competition among firms:
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None
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5. Long-run economic profit potential:
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Can make a profit in long run
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6. Efficiency:
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Does not achieve efficiency
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