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Chapter 10
Identifying Markets and Market Structures
HYDERABAD, PAKISTAN
HYDERABAD, PAKISTAN
What is a Monopoly?
A market structure with only one firm producing goods that have no substitutes and impossible barriers of entry into the market
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Why would a market structure not support more than one firm? The fixed cost in setting up production are so high the firm must have access to a large market to have a low average cost curve
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What is a Patent?
A monopoly right to the use of a specific new technology or the production of a new good
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http://www.napp.org/
http://www.nationalpatent.com
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What is Oligopoly?
A market structure consisting of a few firms producing goods that are close substitutes and entry into the market is difficult
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What happens to the demand curve as more firms enter the industry?
It becomes more elastic
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Does the Perfectly Competitive Firm have to sell at the market price?
It can sell all units it brings to market at the market price but will not sell one unit at a higher price
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What does the Demand Curve look like for a Perfectly Competitive Firm? It is perfectly horizontal at the market price
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Individual quantity
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Market quantity
What is a Relevant Market? What is a Monopoly? What is a Natural Monopoly? What is a Patent? What is Monopolistic Competition? What is Oligopoly? What is Perfect Competition?
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END
1999 South-Western College Publishing
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