tiny firms, big dreams
True or False: All businesses maximize profits in perfect competition.
True
True or False: Companies maximize profits in imperfect competition.
True.
True or False: It is easy to enter and exit an oligopoly market.
False.
True or False: It is easy to enter and exit a monopolistic market.
False.
Tomatoes
undistinguishable goods- perfect competition - high
A good example of perfect competition.
agricultural goods
A perfect example of Imperfect Competition.
Soda market when a new flavor comes out.
Cereal market when a new type of cereal.
Milk market when a new type of milk is created.
Highly competitive markets with an innovation.
A perfect example of an oligopoly market.
The game console market, airlines, banks, car companies.
The number of companies that control the market.
One.
US postal service
barriers to entry - monopoly - low
The types of goods sold in perfect competition.
Identical Goods or undistinguishable
The type of products sold in imperfect competition.
Differentiated products that can be imitated by other producers in a highly competitive market.
What can companies do with prices in oligopoly markets.
Drive them up.
What can the company that controls the market do with the price of goods?
Set it to whatever they want.
Double jeopardy: Diet coke
differentiation or niche - monopolistic competition - low as long as differentiation stays with the consumer
They create the socially optimal level of output.
Another name for Imperfect competition.
Non competitive markers (monopoly, oligopoly, monopolistic competition and other variations).
What companies can do with other companies in oligopoly markets.
Collude or form cartels.
What do monopolies do to increase profit?
Reduce output.
Iphone
innovation -monopolistic competition- temporarily low as long as consumer perceives it
The amount of market power a single business has in perfect competition.
None, it is a price-taker.
True or False: This is the most common type of market.
True.
Products in oligopoly markets can be either ______ or _________.
Homogeneous (the same) or different.
Name 3 types of monopolies.
Legal, natural or patent.
OPEC
What is a cartel? - oligopoly- little