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Giahanbeam Essay

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Below is an essay on "Giahanbeam" from Anti Essays, your source for research papers, essays, and term paper examples.

Four Market Models[pic]
From most competitive to least competitive:

Pure Competition:
    • Involves very large numbers of firms producing identical products.
    • Standardized product (a product identical to that of other producers--ex. corn or cucumbers).
        o no attempt to advertise or differentiate
    • Free Entry and Exit: no significant legal, technological, financial, or other obstacles prohibiting new firms from selling their output in any competitive market
    • No control over the price: "Price Takers"
    • (i.e. the firms have no market power) .
        o The individual firm has very little to no impact on the market.
    • Demand is perfectly elastic.
Maximizes productive and allocative efficiency.
    • ex. Agriculture
    • pure competition markets do not actually exist.
Note: Pure competition does not actually exist in our society, and the agriculture industry is the closest industry to being purely competitive. The pure competition model is used as a standard to evaluate the efficiency of our economy (something to compare to and help our understanding of economy.)

Monopolistic Competition:
    • Involves large number of firms, but not as many as in pure competition.
    • Produces differentiated products (ie. clothing, furniture, books)
        o Nonprice competition - a selling strategy in which firms try to distinguish their product or service on the basis of attributes such as design and workmanship (product differentiation)
        o Focuses mostly on advertising, brand names, and trademarks
    • Firms can easily enter or leave this market, although not as easily as firms in a purely competitive market.
    • Imperfect Competition.
    • Limited control over prices
        o ex. retail trade, dresses, shoes

    • Involves a few firms that exert considerable influence over the industry
    • Produces either standardized or differentiated products.
    • NONPRICE COMPETITION: emphasis on...

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  • Submitted by: giahanbeam1998
  • on December 24, 2011
  • Category: Business and Economics
  • Length: 408 words
  • Views: 295
  • Popularity Rank: 463028
  • 1 rating(s)

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