约克大学summer math 微观经济T8 Perfect competition.pdf

“Market Structures” Competition Market Structure • Market structure – identifies how a market is made up in terms of: – The number of firms in the industry – The nature of the product produced – The degree of monopoly power each firm has – The degree to which the firm can influence price – Profit levels – Firms’ behaviour – pricing strategies, non-price competition, output levels – The extent of barriers to entry – The impact on efficiency Market Structure Perfect Pure Competition Monopoly More competitive (fewer imperfections) Market Structure Perfect Pure Competition Monopoly Less competitive (greater degree of imperfection) Market Structure Pure Perfect Monopoly Competition The further right on the scale, the greater the degree of monopoly power exercised by the firm. Market Structure • Models – a word of warning! – Market structure deals with a number of economic ‘models’ – These models are a representation of reality to help us to understand what may be happening in real life – There are extremes to the model that are unlikely to occur in reality – They still have value as they enable us to draw