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Four Market Models - Coggle Diagram
Four Market Models
Pure, or Perfect Competition
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No control over price, "Price Takers"
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The MR and AR coincide with the demand curve, TR rises by the product price for each additional unit sold
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If the market price is below the minimum AVC, the firm will shut down
Monopolistic Competition
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Some control over price, but with very narrow limits
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Nonprice competition has emphasis on advertising, brand names and trademarks
In the Short Run the firm will maximize profit and minimize loss by producing the level of output at which MR = MC
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Oligopoly
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Price control is limited by mutual interdependence, considerable with collusion
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Nonprice competition is great, particularly with product differentiation