This definition is abstract, just as the definition of perfect competition is abstract. The lecture notes shown below are from the one of the discussion sections for the course. Market structure and market power 1 introduction industries have very. Market power is \opposite of pricetaking behavior ec 105. This section provides lecture notes from the course. The chinese version of the book was already published in 2016. The word monopoly actually translates as one seller. Market structure spectrum 4 markets can be divided into categories depending on degrees of competition and market power.
Cpssiosco principles for financial market infrastructures april 2012 1 confidence under a wide range of potential stress scenarios that should include, but not be. Prices will be competed away until equilibrium is reached and only normal profits are made. This handout gives an overview of the main market structures including perfect competition. The book of advanced microeconomic theory is based on my lecture notes that i have used for more than twenty years. As the number of firms increases, the effect of any one firm on the price and quantity in the market declines. The lecture notes shown below are from the one of the discussion sections for the. The demand for a firms product is perfectly elastic i. As firms enter the market, supply shifts outwards to s 1 and price will fall. In this chapter and the two chapters that follow, we will study four market structures. Market structure information or decision will determine the entrepreneurs competitive marketing strategies. Economics for business full notes lecture notes, lectures 15 notes are made from lecture slides and textbooks lecture notes, lecture budget balance and fiscal policy economics 23115 note lecture notes final economics study notes economics for business notes 5.
Few very large sellers dominate the industry and compete with one another. Practical multiple choice questions, chapters 15 lecture notes, lecture 7 the cost of production lecture notes, lecture 8 profit maximization and competitive supply lecture notes, lecture game theory and competitive strategy lecture notes, lecture 17 markets with asymmetric information walter nicholsonsolutionary microeconomic theory. The word market comes from the latin word marcatus which means merchandise or trade or a place where business is conducted. First and foremost, a monopoly is a monopoly because it is the only seller in the market. Market structures are based on the characteristics of a market. Lecture 6 competition, monopoly, monopolistic competition and. This chapter provides an exposition of the four types of market structures. No single buyer or seller is able to influence market price, because.
Staples and office depot merger 1997, staples and office depot wanted to merge ftc analyzed the effect of proposed merger on consumers. Every firm and every consumer must take the market price of the good as. The study of capital structure attempts to explain how listed firms utilise the mix of various forms of securities in order to finance investment. However, if you are just getting started with this topic, you may want to look at the four basic types of market structures first. Nov 23, 2012 microeconomics video on the four different market structures. We will talk about other market structures where some of these assumptions dont. Unit 4 business organizations and market structures. Economics lecture notes chapter 7 market failure will be taught in the first, second, third and fourth weeks of term 3 in economics tuition. This arises due to consumers indi erence between the products of competing rms for example, buy from store with lowest price. Market structure, lecture notes economics, harvard university ma, united states of america usa,oliver s. Asset pricing slide transfer over time borrow and save to achieve smooth consumption stream over time personal loans, bank loans money market bonds, pensions noncontingent instruments c y t.
A market structure describes the key traits of a market, including the number of firms, the similarity of the products they sell, and the ease of entry into and exit from the market. Lecture notes, lecture market structure 023115 uts studocu. We focus on those characteristics which affect the nature of competition and pricing but it is important not to place too much emphasis simply on the market share of the existing firms in an industry. Within a monopoly market, there are a few characteristics also that explain the profits that are obtained with connection to the degree of competition faced. Key summary on market structures economics tutor2u. Jan 31, 2020 there are quite a few different market structures that can characterize an economy. Market structure part i perfect competition and monopoly. Market structure part i perfect competition and monopoly 11 22. Market structures free download as powerpoint presentation. Industrial organization matt shum hss, california institute of technology lecture 2. In economics market refers to a group of buyers and sellers who involve in the transaction of commodities and services. Market economies and the price system two alternative approaches to answering the three fundamental questions. Characteristics of imperfectly competitive industries a.
The subtopics for each lecture are related to the chapters in the textbook. In a market with perfect competition, the individual firm is a price taker. Rather, it focuses heavily on two leading strands in the literature, in which it has proved possible to bring together a robust theoretical analysis with sharp empirical tests. As the only seller, a monopoly controls the supplyside of the market completely. Economics for business university of technology, sydney distributing prohibited downloaded by keerthana subramani s. Word market has been widely and variedly used to mean a a place or a building where commodities are bought and sold. Each of them has its own set of characteristics and. A business market is made up various types of business that operate together either in cooperation or in competition.
Monopolistic competition large number of potential buyers and sellers differentiated product every firm produces a different product buyers and sellers are small relative to the market. If anyone wants to buy the good, they must buy from the monopoly. Students can refer to economics a singapore perspective for the diagrams. Lecture notes, lecture 12 monopolistic competition and. Types of structures factors that determine market structure characteristics of market structures perfect competition. And just as its hard to find a market that really seems perfectly competitive in all respects. Building a foundation for your future 4 customer characteristics and purchasing hot buttons provide the information needed to decide whether the firm can and should attempt to gain or maintain a sustainable competitive advantage for marketing to a particular market segment lehmann and winer 1994. The products of different firms are perfect substitutes and the cross elasticity is infinite.
Examination of the business sector of our economy reveals firms operating in different market structures. Economists identify a number of characteristics which determine the market structure a firm is said to operate in. I have added almost double the content of this notes into the book. Economics lecture notes chapter 6 market structure will be taught in the first, second, third and fourth weeks of term 2 in economics tuition.
Chapter 8profit maximization and competitive supply 2. Market structure and competition the structure of a market refers to the number and characteristics of the. Market structure is best defined as the organisational and other characteristics of a market. Market demand and market supply determine the market price and quantity. Firms cannot influence the market price because the individual firms production is an insignificant part of the total market.
The first of these relates to the crossindustry studies. In this economy, production and prices are determined in markets. Microeconomics video on the four different market structures. The key condition for a competitive market, as discussed in the previous lecture, is pricetaking.
Lecture 6 competition, monopoly, monopolistic competition and oligopoly 1. Perfect competition, monopolistic competition, oligopoly, monopoly use the attached notes to answer the following questions. These lecture notes were prepared by xingze wang, yinghsuan lin, and frederick jao specifically for mit opencourseware. The literature on market structure is extensive, and the present chapter does not offer a comprehensive overview. Lecture notes principles of microeconomics economics. October 22, 2015 may 24, 2016 tutorschoolgrinds exam notes, market structures notes, micro notes market structures, perfect competition the market structures move from least control to most control so lets begin with the type of market with least influence over ones own destiny. In a pc market in the longrun, if firms making supernormal profits, new firms will enter the market. Oct 04, 2012 lecture 11 market structure perfect competition 1. Extent of information available to market participants.
When a market has a large number of firms, free entry and exit, and a relatively homogeneous product, it can generally be modeled as perfectly competitive, or pc for short. Looking at the characteristics of each market structure. Market structures key concept a market structure is an economic. Concepts of competition whether a firm can be regarded as competitive depends on several factors, the most important of which are. Lecture notes, lecture market structure 023115 uts. The nature of the product differentiated heterogeneous or undifferentiated homogenous. Jan 14, 20 market structure market structure is the interconnected characteristics of a market, such as the number and relative strength of buyers and sellers, degree of freedom in determining the price, level and forms of competition, extent of product differentiation and ease of entry into and exit from the market the types of market structures. The lecture notes are from one of the discussion sections for the course.317 415 444 893 1126 296 1254 1333 26 1328 186 1434 1218 860 526 507 204 1384 583 567 604 793 571 1041 952 366 325 1338 532 287 1267 285 519 958 1418 161 501 114 425 1088 49 673 1260 1367 1356