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(Farmers) (Hairdressers) (Few Firms Control Market) (One Firm Controls Market)
(Farmers) (Hairdressers) (Few Firms Control Market) (One Firm Controls Market)
(Farmers) (Hairdressers) (Few Firms Control Market) (One Firm Controls Market)
COMPETITION
(farmers)
MONOPOLISTIC
(hairdressers)
OLIGOPOLY
(few firms control
market)
MONOPOLY
(one firm controls
market)
Characteristics:
- many buyers & sellers
- Sellers are price
takers
- Free entry to and exit
from market
- Perfect knowledge
- Homogenous goods
- Factors of production
are perfectly mobile
Characteristics:
> non-homogenous
products (there is
product
differentiation)
> No barriers to entry
and to exit from market
> Firms have some
degree of price setting
power (can raise price
without losing all
customers)
Characteristics:
# High barriers to entry
and exit
# High concentration
ratio (few firms supply
majority market)
# Interdependence
(action of one firms
affect another firm)
# Firms differentiate
their product from
other firms
Characteristics:
~ Profit maximization.
(Super Normal Profit)
~ Sole seller in the
market
~ High barriers to entry
~ Price maker
~ Price discrimination