Number of firms Control Over Price

Pure Competition Very large number None-price taker

Monopolistic C Many Some, but within narrow limits Differentiated

Oligopoly-C Few Considerable

Oligopoly-NC Few Limited but by mutual interdependence Standardized or Differentiated

Monopoly One Considerable

Product

Conditions of Entry and Exit

Perfectly Standardized, homogeneous, identical Very easy, no barrier

Standardized or Differentiated

Unique and has no close substitutes

Relatively easy entry and exit

Nonprice Competition

None

Information

ShortRun Optimum Output LongRun ShortRun LongRun ShortRun LongRun

Complete and free information on price and product MR=MC, profit max. MC=P>min. AVC P=MR=SMC=LMC= SAC=LAC TR>TC econ. profit TR<TC econ. loss Entry=Loss Ex.=Profit Normal profit Supply=(MC is rising>AVC)

Considerable emphasis on advertising, brand name and trademarks Low-cost

Significant Obstacles, High Entry or Exit by: -econ. Of scale -advertising -R&D Typically great deal, especially in product differentiation Restricted

Significant Obstacles, High Entry or Exit by: -econ. Of scale -advertising -R&D Typically great deal, especially in product differentiation Restricted

Blocked by: -economies of scale -patents -government franch. Mostly public relations advertising

Highly restricted

MR=MC, profit max.

Profit

Supply

MR=LMC=SMC, where P=LAC=SAC but >MR TR>TC econ. profit TR<TC econ. loss Entry=LossEx.=Profit Normal profit P is not a unique f(x) of Q; No Supply Cur.

Joint MR=MC, profit max. AVC<P>MR MR=LMC= SMC @ MR=LMC TR>TC econ. profit TR<TC econ. loss Economic Profit because of barriers

MR=MC, profit max.

MR=MC, profit max.

TR>TC econ. profit TR<TC econ. loss Economic Profit because of barriers

Cons.Cost=Horizontal P is not a unique f(x) Inc. Cost=Upsloping of Q; No Supply Cur.

MR=MC, profit max. AVC<P>MR MR=LMC=SMC where P>LMC and >LAC TR>TC econ. profit TR<TC econ. loss Economic Profit because of barriers P is not a unique f(x) of Q; No Supply Cur. P is not a unique f(x) of Q; No Supply

Efficiency

Produ. Alloc.

Dec. Cost=Downslop YES. P=Min. ATC YES. P=MC Pure Competition R&D is not emphasize because no incentive will plowback; easily copied P @ Md=Ms, where in very SR Ms is fix (l)

Cur.
NO. Opt. Q > Q @ mi. ATC NO. Opt. Q > Q @ mi. ATC NO. Opt. Q > Q @ mi. ATC NO. Opt. Q > Q @ mi. ATC

Research and Development

NO. P>MC Monopolistic C R&D is emphasize because of need to differentiate product P @Md=Ms, where in very SR Ms is fix

NO. P>MC Oligopoly-C R&D is of great effort to avoid falling prey to new rivals

NO. P>MC Oligopoly-NC R&D is of great effort to avoid falling prey to new rivals

NO. P>MC Monopoly R&D is of great effort to avoid falling prey to new rivals P is @ Opt. Q, where MR=MC, profit max. AVC<P>MR P is @ Opt. Q, where MR=LMC=SMC and P>MR and >LAC Local telephone, electricity

Price ShortDetermination Run

LongRun

P @ LMd=LMs

P @ LMd=LMs

Example

Agricultural markets, stocks and bonds market

Clothing, consumer financial services, professional services,restaurants

Automobiles, aluminium, soft drinks, investment banking