- Home
- Search
- Settings
- Top Contributors
- Help Center
Answer:
Pure Competition:
Maximizes productive and allocative efficiency.
Note: Pure competition does not actually exist in our society, and the agriculture industry is the closest industry to being purely competitive. The pure competition model is used as a standard to evaluate the efficiency of our economy (something to compare to and help our understanding of economy.)
Monopolistic Competition:
Oligopoly:
Pure Monopoly:
source:
- Involves very large numbers of firms producing identical products.
- Standardized product (a product identical to that of other producers--ex. corn or cucumbers).
- no attempt to advertise or differentiate
- Free Entry and Exit: no significant legal, technological, financial, or other obstacles prohibiting new firms from selling their output in any competitive market
- No control over the price: "Price Takers"
- (i.e. the firms have no market power) .
- The individual firm has very little to no impact on the market.
- Demand is perfectly elastic.
Maximizes productive and allocative efficiency.
- ex. Agriculture
- pure competition markets do not actually exist.
Note: Pure competition does not actually exist in our society, and the agriculture industry is the closest industry to being purely competitive. The pure competition model is used as a standard to evaluate the efficiency of our economy (something to compare to and help our understanding of economy.)
Monopolistic Competition:
- Involves large number of firms, but not as many as in pure competition.
- Produces differentiated products (ie. clothing, furniture, books)
- Nonprice competition - a selling strategy in which firms try to distinguish their product or service on the basis of attributes such as design and workmanship (product differentiation)
- Focuses mostly on advertising, brand names, and trademarks
- Firms can easily enter or leave this market, although not as easily as firms in a purely competitive market.
- Imperfect Competition.
- Limited control over prices
- ex. retail trade, dresses, shoes
Oligopoly:
- Involves a few firms that exert considerable influence over the industry
- Produces either standardized or differentiated products.
- NONPRICE COMPETITION: emphasis on product differentiation
- Existing firms are strong rivals and affects each other's price and output.
- Control over price limited by mutual interdependence; considerable with collusion (the decision of rivals).
- Harder for a firm to enter or exit.
- Imperfect competition.
- A great deal of nonprice competition, especially with differentiated products
- ex. steel, automobiles, household appliances
Pure Monopoly:
- Only one firm is involved.
- Products are unique with no substitutes.
- NONPRICE COMPETITION: mostly public relations
- Entry of additional firms is not possible--one firm constitutes the entire industry.
- Entry to the industry is often blocked by government. It requires patent or licenses.
- Since the monopolist produces a unique product, it makes no effort to differentiate its product.
- Imperfect Competition.
- There is total control over price "Price Makers"
- ex. local electric utility
- Oil, John D. Rockefeller
- diamonds
source:
First answer by ID1892520861.
Last edit by ID1892520861.
Question popularity:
1
[recommend question].
What are the safety impacts of headrests in cars?
In: Cars & Vehicles
Answer it!
» more