EC 201 Lecture Notes - Lecture 9: Sunk Costs, Marginal Cost, Average Variable Cost
Document Summary
Econ 201 lecture 9 notes- chapter 9: perfect competition. Perfectly competitive market- a market w/ many buyers and sellers of a homogenous product and no barriers to entry. Price taker- a buyer or seller that takes the market price as given. 5 features of a perfectly competitive market. There are no barriers to market entry. Both buyers and sellers are price takers. Firm-specific demand curve- a curve showing the relationship between the price charged by a specific firm and the quantity the firm can sell. In a monopoly, a single firm serves the entire market, so the firm-specific demand curve is the same as the market demand curve. Large barriers from economies of scale or gov. policies. Air travel, cars, beverages, cigarettes, cell phone services. Monopoly- a single form serves the entire market. Large barriers to market entry b/c of large economies of gov policies. Monopolistic competition- no barriers to entering the market, so there are many firms.
