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雷达卡
EM c8 market structure: monopoly and monopolistic competition
imperfectly competitive markets /imperfect competition- - - - - other three models
market power- the ability of a firm to influence product prices and develop other competitive strategies that enable it to earn large profits over longer periods of time
- - - - related to the barriers to entry in a given market
monopoly
a market structure characterized by a single firm producing a product with no close substitutes
price-setter
a firm in imperfect competition that faces a downward sloping demand curve and must set the profit-maximizing price to charge for its product
profit maximization/ MR =MC
difference: in perfect competition, product price equals marginal cost ----in imperfect competition, price>marginal cost
firms with market power may choose market share over profit in short term
market power causes a misallocation of resources compared with perfect competition
barriers to entry
the structural, legal, or regulatory characteristics of a firm and its market that keep other firms from producing the same or similar products at the same cost
major barriers
1. economies of scale
2. barriers created by government
3. input barriers
4. brand loyalties
5. consumer lock-in and switching costs
6. network externalities
lock-in and switching costs
a form of market power for a firm in which consumers become locked into purchasing certain types or brands of products because they would incur substantial costs if they switched to other products
--competitive strategy for managers
network externalities
a barrier to entry that exists because the value of a product to consumers depends on the number of consumers using the product
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