Please enable JavaScript.
Coggle requires JavaScript to display documents.
Competition and types of competition (Perfect competition: standarized…
Competition and types of competition
The market
Consumers and suppliers interact with each other
Suppliers decide which goods and services are produce and offer and they 're price
Perfect competition
: standarized product available from numerous businesses
Many consumers buying a standardized product from numerous small businesses
No barriers to entry
Small companies, identical products
Price determine by supply and demand (price taker)
Quantity depends on its price
No control of prices
Monospolistic competition
Many sellers but they don't sell identical products
Free entry and exit
Differentiated products
Oligopoly
:
Few sellers
each seller supplies a large portion of all the products sold in the marketplace
Have some control over prices
products fairly similar, one company lowers prices, others are forced to do the same
Monopoly
:
opposite to perfect competition
one seller in the maket
set price and quantity
huge barries of entry
Natural Monopolies
Include public utilities, such as electricity and gas suppliers
they're regulated
Serve al consumers
Legal Monopolies
a company recieves a patent giving it exclusive use of an invented product or process
Patents are issued for a limited time
Without the permission from the patent holder nobody can use the invented product or process
Patents allow companies a certain period to recover the heavy costs (researching and developing products and technologies