TAILIEUCHUNG - Lecture Economics: The basics (2/e): Chapter 5 - Michael Mandel

Chapter 5 - Competition and market power. After reading the material in this chapter, you should be able to: Define perfect competition, and identify its key characteristics; describe how businesses maximize profits in perfectly competitive markets; discuss the long-term outcome of perfect competition; compare and contrast the four types of market structure; explain how market power affects price and quantity supplied. | Chapter 5 Competition and Market Power McGraw-Hill/Irwin Copyright © 2012 by The McGraw-Hill Companies, Inc. All rights reserved. Learning Objectives Define perfect competition, and identify its key characteristics. Describe how businesses maximize profits in perfectly competitive markets. Discuss the long-term outcome of perfect competition. Compare and contrast the four types of market structure. Explain how market power affects price and quantity supplied. 5- The Role of Competition Competition plays a key role in a market economy. Companies are forced to deliver to the product that consumers want at the lowest cost. Competition in the market leads to more production, more innovation, lower costs, and higher living standards. 5- Perfect Competition The highest degree of competition is found in a perfectly competitive market. This is an extreme type of market structure rarely found in the real world. In perfect competition, all buyers and sellers are price takers. In this case, buyers and sellers do not set the price of their product, but take the price as given. Prices are determined by the market. 5- Conditions Necessary for Perfect Competition For a market to be perfectly competitive, the following conditions must hold: First, products have to be standardized or homogenous so there is little difference between them. Second, sellers and buyers must be well-informed about what all the other sellers are charging. 5- Conditions Necessary for Perfect Competition Third, a market with perfect competition will have many sellers and many buyers. No buyer or seller is large enough to have an impact on the price. In national or global markets, buyers and sellers are in different parts of the country or the world. 5- Examples of Perfect Competition Most markets do not meet all three of the conditions necessary for perfect competition. But today’s economy is moving more toward perfect competition as more markets become global. Agricultural markets are .

• Kinh tế học
• Lecture Economics
• Financial crisis
• Global market economy
• Market power
• Perfectly competitive markets
• Market structure
• Business economics
• Lecture Business economics
• Business applications of economics
• Open economy
• Competitive markets
• Economic Models
• Economics of agriculture
• Development economics
• Lecture Development economics
• Kinh tế phát triển
• Economic growth
• Developing nations
• Economics of agricultural development
• Principles of economics
• Managerial economics
• Lecture Managerial economics
• Market interactions
• Fundamentals of managerial economics
• Marginal analysis
• Marginal benefit
• Lecture Principles of economics
• Ten principles of economics
• People face tradeoffs
• Opportunity cost
• Marginal changes
• Element of economics
• Lecture Element of economics
• Economic systems
• Economics problems
• Macroeconomic issues
• Economics of information
• Consumer choice
• Free rider problem
• Market transactions
• Economic principles
• Economic policies
• Economics of farm policy
• Farm policy
• Social issues
• Economics of social issues
• Lecture Economics of social issues
• Economics of crime
• Classification of criminal acts
• The costs of crime
• Economics of education
• Increased demand for education
• Educational expenditures
• Monopoly power
• Economics of monopoly power
• Professional sports
• Economics of professional sports
• Professional sports business
• Issues in economics today
• Lecture Issues in economics today
• International issues
• Price control issues
• Economics of children
• Public economics
• Kinh tế học
• Foreign markets
• Monopolistic competition
• Macroeconomic policy
• Supply curve
• Elasticity of demand