ECON 1 Lecture Notes - Lecture 6: Average Variable Cost, Fixed Cost, Marginal Cost
Document Summary
Econ1 - introduction to economics - lecture 6: perfect competition. Economists have developed four primary models of market structure: perfect competition, monopoly, oligopoly, and monopolistic competition. This system of market structure is based on two dimensions: The number of firms in the market (one, few, or many) Whether the products are identical or differentiated. A price-taking producer is one whose actions have no effect on the market price. A price-taking consumer is one whose actions have no effect on the market price of the good it sells. of the good he or she buys. In a perfectly competitive market, all participants are price takers. In a perfectly competitive industry producers are price takers. 1) for an industry to be perfectly competitive, it must contain many producers none of whom has a large market share. A producer"s market share is the fraction of the total industry output accounted for by that producer"s output.
