T5 - Market Structures Flashcards
What are the types of markets
Perfect competion
Monopolistic comp
Oligopoly
Monopoly
What is perfect competiton
Large number of buyers and sellers
Perfect info
Able to sell as much as they like
Homogenous product
No borriers to entry or exit
Price takers
Supernormal short run profits
No super normal long run profits
Price is only form of comp
What is monopolistic comp
Similar to perfect comp
Product differentiation
Many firms
Low entry and exit costs
Any profit level is possible
Price makers
Non price comp
What is an oligopoly
Few firms controlling majority of market share
Differentatioed product
High barriers to entry
Supernormal profits long run and short run
Price makers
Non price comp
What is monopoly
One firm leading the market with all market share
Limited product types
High barriers to entry
Supernormal long run and short run profits
Price makers
Non price competion
Features of market structures
Number of firms
Market share
Nature of costs
Level of vertical integratoon
Producr differentiation
Structure of buyers
Turnover of customers
What are sunk costs
Costs which cannot be recovered
