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Market Structure - Mind Map
Mind Maps have been produced to introduce topics and give students an overview of key topics being studied. The maps can be viewed as a whole page or, for those who prefer a more linear approach, as a text version.
View larger version of the mind map.
Market Structure
- Perfect Competition
- Large number of firms
- Price takers
- Homogenous products
- Perfect information
- Freedom of entry and exit
- No external costs or benefits
- P = AR = MR
- Long run - normal profit
- Long run - costs minimised
- P = MC
- Long run output at maximum efficiency
- Monopoly
- Market dominated by one firm
- Natural monopolies - utilities
- High barriers to entry
- Pricing strategies to prevent competition
- Abnormal profit in short and long run
- Welfare losses
- Possible benefits of monopolies
- Potential to be regulated
- Sources of monopoly power
- Dominant market share
- Ownership of resources
- Legal
- Patents
- Ability to erect barriers to entry
- Duopoly
- Market dominated by 2 firms
- Possibility of collusion
- Highly interdependent
- High barriers to entry
- Price leadership
- Oligopoly
- Competition amongst the few
- High Concentration ratio
- High degree of interdependence
- Stable or rigid prices?
- Non-price competition
- Homogenous or highly differentiated goods
- Saucer shaped AC curve
- Possibility for collusion
- Barriers to entry
- Monopolistic or imperfect competition
- Large number of firms
- Product differentiation
- Relative freedom of entry and exit
- Imperfect knowledge
- D = downward sloping
- P > MC - Allocative inefficiency
- Long run equilibrium - not technically efficient
- Long run equilibrium - normal profit
- Firms have some control over price
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