3.1 Market Structure课件.ppt

1-# OUTCOME 3.1  Explain how market structures in practice deviate from the model of perfect competition Explain the model of perfect competition and its characteristics. Explain the common market structure in practice. Explain the deviation from perfect competition. It is suggested to compare their characteristics, such as the number of sellers, comparability of goods, market power, information and entry of the market. Market Demand The demand for a good or service is defined as: Quantities of a good or service that people are ready (willing and able) to buy at various prices within some given time period, other factors besides price held constant. Market Demand Market demand is the sum of all the individual demands. Market Demand The inverse relationship between price and the quantity demanded of a good or service is called the Law of Demand. Market Demand Changes in price result in changes in the quantity demanded. This is shown as movement along the demand curve. Market Demand Changes in nonprice determinants result in changes in demand. This is shown as a shift in the demand curve. Market Demand Nonprice determinants of demand Tastes and preferences Income Prices of related products Future expectations Number of buyers Market Supply The supply of a good or service is defined as: Quantities of a good or service that people are ready to sell at various prices within some given time period, other factors besides price held constant. Market Supply Changes in price result in changes in the quantity supplied. This is shown as movement along the supply curve. Market Supply Changes in nonprice determinants result in changes in supply. This is shown as a shift in the supply curve. Market Supply Nonprice determinants of supply Costs and technology Prices of other goods or services offered by the seller Future expectations Number of sellers Weather conditions Market Equilibrium We are now able to combine supply with demand int