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Market structure

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This is a complete guide to the topic of market structure, curated by straight A students using scientific proven methods for smart notetaking to maximise comprehension and retention, ensuring you a big, red straight A on your report card.

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  • July 7, 2024
  • 5
  • 2018/2019
  • Book review
  • Unknown
  • Secondary school
  • 4
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MARKET
STRUCTURE

, COMPETITIVE MARKETS :




>
of
-



market structure conditions which exist market number firms.
including
:
in a




↳ markets
one
type is
competitive .




un
market with firms of firms
large number


that
many

with each other .
I
compete
2 What are the conditions in a
competitive market .
(market structures
>
-




many buyer
a sellers
un

small market share .


consumer
Sovereignty- CONSUMER POWER !
·




demand
Elastic &
supply
·




.




free (Nolminimum barriers -> low
profits (long run
entry & exit
·




-

THE BEHAVIOUR
↳ Pressure for low
price

competitive advantage >
Improving product quality
* PRODUCER :

Larger market share
-




.

Quick full to demand
.
&
responses changes in




* Normal
profit= min .
level of
profit required to keep the firm in the


the
industry in long run
.




Supernormal profit
&
+ above normal profit.
↳ What the effect
is of
supernormal profit ?
Attracts new firms -
Surplus
↓ Reduced Profit falls to
price - normal profil


-


PERFORMANCE :




↑ Promotes efficiency
threat to be
allocatively efficient /carrota systems
productively
a
-




incentive a : stick


low price to costs
-




cover

-
Prices
>
-

not
competitive firms- small
are
very
&
WHY ?
low .


Large scale + low
mu
unit costs



Economies Of


scale .

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