market structure Flashcards
name 4 characteristics of perfect comepetition?
homogenous products
perfectly elastic demand curve
low barriers to entry and exit
all firms have access to factors of production
what is one example of perfect competition?
foreign exchange
what relationships to perfectly competitive firms have with price?
they are price TAKERS
what shape is the ac curve ?
u shape
what shape is the mc curve?
nike tick
where is the profit maximising point?
MC = MR
where do MC and AC intersect?
at the lowest point of AC
what type of profit can a perfectly competitive market make in the LR ?
normal profit
what does a firm need to do to stay in business in the short run?
to cover their variable costs
what does a firm need to do to stay in business in the long run?
to cover their average costs and total costs
what is the point is normal profit achieved at?
AC = AR
where is the allocatively efficient point ?
P = MC
where is the productively efficient point?
when the firm is producing at the lowest point of AC
what are 4 characteristics of monopoly markets?
differentiated products
high barriers to entry
horizontal integration - business buying competitors at the same stage of production
vertical integration - business buy competitor at a different stage of production
what is a monopolies relationship with price?
they are price MAKERS
