BIOC 212 Chapter Notes - Chapter 2-7: Competitive Equilibrium, Economic Equilibrium, Economic Surplus
17 Aug 2018
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(4) oligopoly (chapters 11 and 12: perfect competition is sometimes referred to as competitive market. Identical products: ease of entry or exit, example: agricultural products, many firms, differentiated products, ease of entry or exit, example: hotel industry, restaurants, a few firms. Identical or differentiated products: barriers to entry, example: aircraft industry, one firm, barriers to entry, example: Why the firm"s demand curve is horizontal: perfectly competitive markets have ve characteristics that force rms to be price takers, many small buyers and sellers. Both sellers and buyers are price takers. no single rm"s action can raise or lower the price: all rms produce identical products. Why we study perfect competition: perfectly competitive markets are important for two reasons: (1) many markets can be reasonable described as competitive. Many commodity market such as wheat, sugar, cocoa, and coffee, building construction, stock market exchanges, and other types of markets have many or all of the properties of a perfectly competitive market.
