Question 2: Explain the concept of a concentration ratio. Is the concentration ratio in a monopolistically competitive industry likely to be higher than for a perfectly competitive industry? Explain your answer (6 marks) Suppose the minimum point on the Long-run Average Cost (LRAC) curve of a soft drink firm’s lemonade is $1 per litre. Under conditions of monopolistic competition, will the price of a litre bottle of
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MARKET STRUCTURES MARKET STRUCTURE In economics, market structure (also known as market form) describes the state of a market with respect to competition. MAJOR MARKET FORMS The major market forms are: • • • • • Perfect competition, in which the market consists of a very large number of firms producing a homogeneous product. Monopolistic competition, also called competitive market, where there are a large number of independent firms which have a very small proportion of the market share. Oligopoly
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Aspects of Market Structure The four types of market structure are listed in the drawing below: Characteristics of an oligopoly Definition Oligopoly is a type of imperfect competition with a market structure, that has only a small group of sellers which offers similar or even identical products. Oligopolist, Oligopoly An oligopoly is a market form in which a market is dominated by a small number of sellers (oligopolists). There are few participants in this type of market and each
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The New International Trade The “New” international trade refers to trade issues that are related to imperfect markets. The Infant Industry Argument The Argument: In some industries, new firms cannot compete with established firms because they don’t have enough experience. According to this argument, the government should use import barriers to protect these infant industries. The Learning Curve Describes the relationship between historical output and current average cost of production. Also
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Ten Principles of Economics 3 Chapter 2 Thinking Like an Economist 7 Chapter 3 Interdependence and the Gains from Trade 10 Chapter 4 The Market Forces of Supply and Demand 13 Chapter 5 Elasticity and Its Application 20 Chapter 6 Supply, Demand, and Government Policies 26 Chapter 7 Consumers, Producers, and Efficiency of Market 31 Chapter 8 Application: The Costs of Taxation 35 Chapter 9 Application: International Trade 39 Chapter 10 Externalities 42 Chapter
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that the labor market is competitive, so that marginal resource cost equals the market wage. a. (4 points) Now suppose this firm is in a perfectly competitive market and that the market price is $2. What is the marginal revenue product of the 2nd hour of labor? Briefly explain your answer. b. (6 points) If the market wage is $10, how many hours of labor should this firm hire to maximize profit? Briefly explain your answer. c. (6 points) Now suppose that the firm has market power and that
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and the oligopolistic market. Firstly, I am very grateful to my team members who cooperate and work together with me to complete this report. Now, we bonded more closely and learn about the market together. In my opinion, I am very lucky to have them working together with me. They are very hardworking and knowledgeable. Secondly, by doing this report, I know more on what market structure is and difference in efficiency between perfectly competitive market and oligopoly market. Other than that, it
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Fall 2012 CHAPTER 1: THE CHALLENGE OF ECONOMICS 1 CHAPTER 1: THE CHALLENGE OF ECONOMICS Definitions and Questions All economic questions and problems arise because human wants exceed the resources available to satisfy them. Scarcity: - The condition that arises because the available resources are insufficient to satisfy wants. o Our resources are limited but our wants are unlimited. - Scarcity: Lack of enough resources to satisfy all desired uses of those resources The Central Problem of
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secondary or indirect results, the use of cost-effectiveness analysis may be irrelevant or counter-productive. PART B YES Against the backdrop of a perfectly competitive energy market, the current form of DSM can not survive. Market decisions are not examined as a reflection of DSM value because DSM's very existence presupposes that consumers' market choices about conservation investments are inferior. The standard defense of DSM on economic grounds begins by assuming deep flaws in consumer rationality
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for range of applications. • Market dominance, retaining a competitive advantage because of superior innovation and solution integration of hardware, software, and content distribution. • Unique ability to internally design and develop operating systems, hardware, application software, and services perfectly to achieve first mover advantages. • Continuous offering of new product categories to avoid price competition in maturing product markets.
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