Perfect Competition
Perfect competition assumes this number of firms exist providing the product.
What is very many?
An example of a firm in Monopolistic Competition.
Several Options:
Restaurants, clothing stores, shops, etc.
Oligopoly exists is the top ___ firms make up ____ percent or more of the total market.
four ; 40%
A monopoly exists when this is true about the firm and the market.
What is when the firm is the ONLY supplier of the good?
This is the most common type of market structure in the world today.
What is Monopolistic Competition?
The kinds of products usually associated with Perfect Competition.
What are agricutural products? (Or something similar)
What is limited power? (only power to price their own version, and must still remain aware of the market)
This is when firms work together openly and don't care that people know it.
What is Overt Collusion? (Will also accept Cartel Behavior)
A real world example of a monopoly.
Several answers acceptable, including:
Diamonds (DeBeers), Sports (NBA, NFL, etc.), Robber Barons of the past (Carnegie, Rockefeller, etc.)
This is the field of economics that pertains to Oligopoly and their tendency to make decisions based on the actions of the others in the market.
What is Game Theory?
How similar the different firms' products are in Perfect Competition
What is Identical?
A common strategy in monopolistic competition used to acquire market share by affecting the "T" of "TRIBE"
What is Advertising?
The game theory choice that is ALWAYS best for a player no matter what choice their opponent makes.
What is a Dominant Strategy?
Monopolies have the ability to earn this in the long run, while most other markets will not.
What is Economic Profit?
The only market structure that will end up being Efficient.
What is Perfect Competition?
The pricing power a firm has in Perfect Competition.
What is none? (They are price takers)
When people believe there to be something unique or different about a product even if it may not be true. (Vocab)
What is Perceived Differentiation?
The more "acceptable" term for Tacit Collusion; in this the other oligopolists base their market decisions around the biggest one.
What is Price Leadership?
The term for an industry where a monopoly "makes sense", like power companies or utilities.
What is a Natural Monopoly?
Elasticity measures this, and tends to be higher for products where there are more options.
What is how responsive customers are to the price of a product?
A reason why perfect competition does not really exist in the real world.
Several options:
Lack of information, not everything is actually identical, etc.
Why there zero economic profits in the long run for a Monopolistic Competitior.
What is a lack of barriers to entry and/or the ability of others to copy success?
What is a Nash Equilibrium?
A reason why Monopolies are generally considered undesirable.
The rules for maximizing profit for any firm.
Find the quantity where MR=MC, charge that price on the demand curve. Shut down if this doesn't cover your variable costs.