ECON 1201 Lecture Notes - Lecture 23: Rice Krispies, Lyft, Monopolistic Competition
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In order to survive, you need scale, scope and access to capital. Blue shift: you need to be a large dealer to keep up with the market. If you are not large enough, then you can"t compete in the car market. Some argue that demand for cars may fall b/c of uber and lyft, millennials do not value a car as much as generations before. No costs of buyers to switch to different sellers (no fee for buying captain. No cost to figure out the quality of goods being consumed (search google reviews) free to enter and exit (no legal or government barriers) No one cares where your wheat came from. Provides insights into all of the markets. We distinguish between what happens at the market or industry level and what happens at firm level. Each firm in a competitive market is a price taker.
