ECON-1006EL Chapter Notes - Chapter 8: Price Discrimination, Deadweight Loss, Economic Surplus
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In the real world, we can distinguish among 3 broad types of imperfectly competitive markets: pure monopoly, oligopoly, and monopolistic competition. Pure monopoly a market in which there is only one supplier of a unique product with no close substitutes (each of which is called a monopolist) Ex. people of a neighborhood must buy electricity from their local supplier, or do without. Oligopoly a market in which there are only a few rival sellers (each of which is called an oligopolist) Monopolistic competition a market structure in which a large number of firms sell slightly differentiated products that are reasonably close substitutes for one another (each of which is called a monopolistic firm) A monopolistically competitive firm is one of many firms that produce slightly different but very similar goods. The firms that participate in any of these 3 market types can be called imperfectly competitive firms. The essential difference between perfectly and imperfectly competitive firms.