ECON 10010 Lecture Notes - Lecture 9: Tap Water, Root Mean Square, Marginal Revenue
Document Summary
Many industries fall somewhere between the polar cases of perfect competition and monopoly : imperfect competition. Oligopoly : a market structure in which only a few sellers offer similar or identical products. Economists measure a market"s domination by a small number of rms with a statistic called the: concentration ratio : the percentage of total output in the market supplied by the four largest rms. Monopolistic competition : a market structure in which many rms sell products that are similar but not identical. Many sellers: there are many rms competing for the same group of customers. Product differentiation: each rm produces a product that is at least slightly different from those of other rms. Thus, rather than being a price taker, each rm faces a downward-sloping demand curve. Free entry and exit: firms can enter or exit the market without restriction. Thus, the number of rms in the market adjusts until economic pro ts are driven to zero.
