Chapter 8

Question 1

Modelos de Mercado

Answer 1

• Son cuatro.
• Competencia perfecta
• Competencia monopolística
• Oligopolio
• Monopolio

Question 2

Características Competencia Perfecta

Answer 2

• Very large numbers of sellers
• Standardized product (todos producen y venden exactamente lo mismo)
• “Price takers”
• Easy entry and exit
• Perfectly elastic demand: Firm produces as much or little as they want at the price. Demand graphs as horizontal line

Question 3

Características Competencia Monopolística

Answer 3

• Relatively large number of sellers
• Differentiated products
• Easy entry and exit
• Advertising

Question 4

Producto Diferenciado

Answer 4

• Atributos: Diseño y características del producto (Bic Mac y Wopper son Hamburgers pero no son iguales en sus atributos).
• Servicios que acompañan al producto (delivery, trato, etc.).
• Localización (importante en actividades turísticas. No es lo mismo un hotel idéntico en una playa, en un campo o en un pueblo).
• Típico en competencia monopolística, también ocurre en el oligopolio.

Question 5

Características Oligopolio

Answer 5

• A few large producers
• Homogeneous or differentiated products
• Limited control over price: Mutual interdependence. Strategic behavior
• Entry barriers
• Mergers

Question 6

Características Monopolio

Answer 6

• Single seller: a sole producer 
• No close substitutes: unique product 
• Price maker: control over price 
• Blocked entry: strong barriers to entry block potential competition
• Non-price competition: mostly PR or
advertising the product

Question 7

Barrier to Entry

Answer 7

• a factor that keeps firms from entering an industry.
• Economies of Scale
• Legal Barriers: Patents and Licenses
• Ownership of Essential Resources
• Pricing
• A más nos movemos de la competencia perfecta al monopolio mayor seran las barreras de entrada.

Question 8

Collusion

Answer 8

• Cooperación entre rivales. 
• Negocios se ponen de acuerdo para:
– Fijar precios 
– Dividirse el mercado 
– Restringir la entrada de la competencia

Question 9

Overt Collusion

Answer 9

• Cartels - a group of firms or nations that collude
- Formally agreeing to the price
- Sets output levels for members
• Collusion is illegal in the United States
• OPEC