Unit 3 (market Structures)

Question 0

Oligopoly

Answer 0

A few large firms
Similar products with brand loyalty
Imperfect knowledge
High entry barriers
Price setter / collusion
Not allocatively or productively efficient

Question 1

Monopoly

Answer 1

One firm
Unique product
High entry barriers
Imperfect knowledge
Price setter
Not allocatively or productively efficient

Question 2

Monopolistic compotion

Answer 2

Many small firms
Slightly differentiated products
Imperfect knowledge (perfect about supernormal profit)
Low entry barriers
Price setter to extent as goods are differentiated
Not allocatively or productively efficient

Question 3

Perfect competition

Answer 3

An infinite number of firms
Homogenous products
Perfect knowledge
No entry barriers
No pricing power
Allocatively and productively (only in long run) efficient