2020 AP Microeconomics | Unit 4 IMPERFECT COMPETITION Source: Packed adapted from Georgia Virtual Shared Content Lesson 1: Monopoly Monopoly A monopoly is the opposite of perfect competition. For a monopoly to exist, there can only be one seller of goods for which there are no close substitutes. While there are certain instances when monopoly power is justified, generally monopolies are viewed ...
Monopolistic competition IsIs StarbuckStarbuck’ss ccoffeeoffee rreallyeally different from any other? Monopolistic competition A monoppyolistically comppetitive ppgroducer is one amongst many producers of goods or services that are differentiated. The industry has the structure of monopolistic competition. A differentiated product is slightly different from the goods or services offered by other close competitors. Differentiation by style or type or location “horizontalhorizontal productproduct ddifferentiationifferentiation” Differentiation by quality “vertical product differentiation” Substitutes are available for the monopolistic competitors product 1 ...
UNIT 6 Pricing under different market structures Perfect Competition Market Structure Perfect Pure Competition Monopoly Monopolistic Competition Oligopoly Duopoly Monopoly The further right on the scale, the greater the degree of monopoly power exercised by the firm. Perfect Competition • Firms are price-takers –Each produces only a very small portion of total market or industry output • All firms produce a homogeneous product • Entry into & exit from the market is unrestricted 3 Demand for a Competitive ...
SECTION 11: Market Structures: Perfect Competition & Monopoly: Need to Know: PERFECT COMPETITION Optimal Output Rule: produce the quantity where MR=MC Average revenue (AR) = TR/Q. When the firm is a price taker, AR = PQ/Q = P Pricetaking firms cannot raise or lower the price, the horizontal P=MR=AR=D (this line also serves as the demand curve for the product. A horizontal demand curve was previously described ...
Monopolistic Competition Market Characteristics # Sellers Monopolistic Type of Product Ease of Entry/Exit Competition Information Price Control 4 Market Structures Number of Firms? Many firms Type of Products? One Few Differentiated Identical firm firms products products Monopolistic Perfect Monopoly Oligopoly Competition Competition • Tap water • Soft Drinks • Shoes • Wheat • Electricity • Automobiles • Restaurants • Milk ...
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