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market structures (oligopoly (small number of sellers, differentiated…
market structures
oligopoly
small number of sellers
differentiated products
interdependance
large amount of market power
difficult to entry
has the kinked demand curve
monopolistic competition
large number of sellers
differentiated product but highly substitutable
easy entry/exit
small amount of market power
Monopoly
firm is a profit maximiser
high barriers to entry/exit
differentiated product - firm is price maker
one seller dominating the market
perfect competition
large number of sellers
decisions are made without worrying about how the competition will react
firms are price takers
very low entry barriers
identical products perfectly substitutable
perfect knowledge
only control firms have is level of output that will maximize their profit mr=mc
in the long run profits are olwes equal to zero