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Four Market Structures

Four Market Structures. Pure Competition. Market Structure Continuum. Four Market Structures. Pure Monopoly. Pure Competition. Market Structure Continuum. Four Market Structures. Monopolistic Competition. Pure Monopoly. Pure Competition. Monopolistic Competition.

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Four Market Structures

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  1. Four Market Structures Pure Competition Market Structure Continuum

  2. Four Market Structures Pure Monopoly Pure Competition Market Structure Continuum

  3. Four Market Structures Monopolistic Competition Pure Monopoly Pure Competition Monopolistic Competition Market Structure Continuum

  4. Four Market Structures Oligopoly Pure Monopoly Pure Competition Monopolistic Competition Market Structure Continuum

  5. Four Market Structures Pure Monopoly Pure Competition Monopolistic Competition Oligopoly Market Structure Continuum

  6. Characteristics of Pure Competition • very large numbers • standardized product • price-takers • easy entry & exit Pure Monopoly Pure Competition Monopolistic Competition Oligopoly Market Structure Continuum

  7. Pure Monopoly Characteristics: • Single seller • No close substitutes • Price-maker • Blocked entry

  8. Pure Monopoly • Examples • public utilities

  9. Pure Monopoly • Examples • public utilities • professional sports teams (Maple Leafs)

  10. Barriers to Entry • Economies of Scale (Microsoft, aircraft) • Legal Barriers to Entry: Patents (drugs)& Licenses (CRTC) • Ownership or Control of Essential Resources • Pricing & Other Strategic Barriers to Entry

  11. Monopolistic Competition& Oligopoly

  12. Four Market Structures Monopolistic Competition Pure Monopoly Pure Competition Monopolistic Competition Market Structure Continuum

  13. Characteristics of Monopolistic Competition • Relatively Large Number of Sellers • Small Market Shares • No Collusion • Independent Actions (little interdependence)

  14. Characteristics of Monopolistic Competition • Differentiated Products • product attributes (physical, qualitative) • service • location (small convenience stores) • brand names & packaging (Bayer vs. Anacin) • some control over price

  15. Characteristics of Monopolistic Competition • Relatively Large Number of Sellers • Differentiated Products • Easy Entry & Exit • Advertising

  16. Four Market Structures Oligopoly Pure Monopoly Pure Competition Monopolistic Competition Oligopoly Market Structure Continuum

  17. The Characteristics of Oligopoly • A Few Large Producers • Homogeneous or Differentiated Products • Control Over Price, but Mutual Interdependence • Entry Barriers • economies of scale • high capital costs • ownership of raw materials • Mergers

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