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Microeconomics
Test Review
Chapters 23-29 |
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23. Pure
Competition |
27. Factor market models |
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I. Product Market Review View Entire Introduction to Part 2 12/17/18 | |||||
Model Characteristic |
Pure Competition |
Monopolistic Competition |
Oligopoly |
Monopoly |
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Number of companies |
Infinite |
Many |
Few |
One |
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Similarity of product |
Identical |
Different |
Standardized or Differentiated |
Not Applicable |
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Ease of new firm entry |
Very Easy |
Relatively Easy |
Very Difficult |
Not Possible |
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Control over price |
None |
Some |
Interdependent |
Substantial |
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Non-Price competition (Advertising) |
Industrial |
Substantial emphasizing product differentiation |
More for Consumer than Industrial Goods |
Good Will Advertising |
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Examples |
Agriculture |
Clothes |
Autos and Steel |
Utilities |
II.
Pure Competition Review
View
Entire Chapter 23
A purely competitive market exists when the number of independently acting buyers and sellers is so large that individual participants have no affect on market price and quantity. A.
Competition is
efficient. |
III. Monopoly
View
Entire Chapter 24
A monopoly exists when one
firm has continued control over a unique market. |
IV.
Monopolistic Competition
View Entire Chapter 25
A. A monopolistically competitive market
exists when a substantially large |
V. Oligopoly
View
Entire Chapter 26 A. An oligopoly market exists when barriers to entry result in a few producers. 1. Products may be homogeneous or differentiated. 2. Examples include many industrial products such as steel and consumer goods like soda. 3. Automobile, steel, game consoles and other oligopolistic industries lost monopoly power because of the foreign invasion beginning in the 1970's. a. Eventually American companies became more competitive. b. The price was lower real wages for manufacturing workers. c. The oligopolistic nature of the video game consol market 4. Concentration ratios measure the amount of total output controlled by a few firms. a. eight-firm concentration ratio - Amosweb is Economics .. b. four-firm concentration ratio -Amosweb 5. Readings a. Six movie studios movie studios receive 90% of American film revenues. b. The television industry is mostly an oligopoly of five companies: Disney/ABC , CBS c. NBC Universal Time Warner and News Corporation See Concentration of media ownership . d. Four major music companies receive 80% of recording revenues. e. Four wireless providers control 89% of the cellular telephone market. f. There are just six major book publishers. g. Healthcare insurance in the United States consists of very few insurance companies controlling major market share in most states. For example, California's insured population of 20 million is the most competitive in the nation and 44% of that market is dominated by two insurance companies, Anthem and Kaiser Permanente. h. Anheuser-Busch and Miller Coors control about 80% of the beer industry. B. 1. Kinked demand 2. Collusive pricing 3. Price leadership Please |
VII. Factor market models 27) Demand for Economic Resources
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Rent Interest Profits
Chapter 29
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