ECON 1010 Chapter Notes - Chapter 4: Imperfect Competition, Deadweight Loss, Perfect Competition

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erinchimpanzee657

19 May 2017

School

University of Manitoba

Department

Economics

Course

ECON 1010

Professor

Laura K.Brown

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ECON 1010 Full Course Notes

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Imperfectly competitive markets are those who fail to meet at least one requirement of a perfectly competitive market. : price-taking firms can sell as much as they want at the current market price. However, if they increase the price, they lose all their sales. This means the demand curve for a price-setting is downward sloping. : a market composed by firms that are price-setters is said to be an imperfectly competitive market. There are three forms of imperfectly competitive markets: : monopoly: there is only one firm in the market. Hence the firm"s individual demand curve coincides with the market demand curve. Microsoft windows, which is essentially the only operating system in the whole market for personal computers, or australian post: monopolistic competition: there is a large number of firms, each producing a slightly differentiated product. Restaurant industry: an italian restaurant offers similar products compared to. Japanese restaurants (i. e. food) but they don"t offer exactly the same type of food.

Related Questions

1. How is a monopolistically competitive market similar to a perfectly competitive market?

A. There are no restrictions on the entry of new firms.

B. Both have differentiated products with close substitutes.

C. Producers with market power set their own prices.

D. Both have homogeneous products with no close substitutes.

2. Which of the following common features do monopolistically competitive markets, and monopolies share?

A. Barriers restrict new firms from entering.

B. Firms face downward-sloping demand curves.

C. Consumers with market power set prices.

D. Producers with no market power set their own prices.

ceruleancicada74

A major difference between monopolistic competition and perfect competition is:

a. there are barriers to entry in monopolistic competition. There are no barriers to entry in perfectly competitive markets.

b. monopolistically competitive firms sell differentiated products. Perfectly competitive firms sell identical products.

c. government regulation restricts the ability of monopolistically competitive firms to change their prices. Perfectly competitive firms face no price regulation.

d. the market demand curve in a monopolistically competitive market slopes downward. The market demand curve in a perfectly competitive market is horizontal

bronzecattle701

1. Which of the following is a difference between a perfectly competitive market and a monopoly?

A. There are huge barriers to entry in a perfectly competitive market, while there are no barriers to entry in a monopoly.

B. The market demand curve faced by a perfectly competitive firm is horizontal, while the market demand curve in a monopoly is downward-sloping.

C. The sellers in a perfectly competitive market are price-makers, while a seller in a monopoly market is a price-taker.

D. The equilibrium price in a perfectly competitive market exceeds marginal revenue, while the equilibrium price in a monopoly equals marginal revenue.

2. Which of the following firms is likely to have the highest market power?

A. An oligopoly with homogeneous products

B. A monopoly

C. A monopolistic competitor

D. A perfectly competitive firm

graygrasshopper945

ECON 1010 Chapter Notes - Chapter 4: Imperfect Competition, Deadweight Loss, Perfect Competition

ECON 1010 Full Course Notes

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