ECON 2030 Lecture 6: Notes - Chapter 14.docx
Document Summary
Market structure: what does the market look like, are there lots of other competitors, or very few, what is the nature of the market, perfect competition (one extreme, perfect non competition/monopoly (opposite extreme, by looking at the extremes, we can observe the most extreme of market decisions, characteristics of the market determine the behavior of the sellers, sellers are limited to their environment. 2: perfect information for this to hold, buyers and sellers in the market must have perfect information, we (buyers) need to know what"s going on in the market, we need to know that there are other sellers and their prices, sellers need to know who else is selling, and what price they are charging you need to know your competition, no barriers to entry/exit, this matters in the long run, not short run, anyone that wants, can begin selling a good, in the long run, economic profit is normal (=0)