ECON 101 Study Guide - Final Guide: Hartford Hospital, French Foreign Legion, Marginal Cost
1 Mar 2018
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Most industries are not monopolies or not perfectly competitive. Rather, most markets are either oligopolistic or monopolistically competitive. Firms -the number of firms in the industry (monopoly one; oligopoly few) Goods -the similarity of the good or service produced by the firms in the industry. Barriers to entry -the ease (or difficulty) with which new firms can enter the industry. 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. The individual farmer/firm takes the market price as determined by the overall market. Thus the companies are called price takers or price taking market. And let"s make the numbers a little easier to work with: instead of thousands of bushels at a bushel we will just assume it is 1, 2, 3 etc. A firm that is the only seller of a good or service that does not have close substitutes.
