01:220:102 Chapter Notes - Chapter 13: Average Cost, Cecil Rhodes, Monopolistic Competition

• School: Rutgers University
• Department: Economic
• Course: 01:220:102
• Professor: J A C K Skydel

Document Summary

4 market structures: perfect competition, monopoly, oligopoly, monopolistic competition. Market structures are based on the number of producers in the market and whether the goods offered are identical or differentiated (different products but suitable to consumers). Free entry and exit; many numbers of producers/ firms. Profits vanish in the long run; becomes zero; break even. Perfectly elastic demand curve; horizontal since it"s a price taker. Price maker; their actions affect market price. Single producer sells a single, undifferentiated, unique product. Sells products that may be identical or differentiated. Free entry and exit in the long run. Price maker; their actions affect market price; market power. Single, undifferentiated, unique product; has no close substitutes. Under perfect competition, the price and quantity are determined by supply and demand. Here, the competitive equilibrium is at c, where the price is pc and the quantity is qc.