Competitive markets demand and supply
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This document discusses different types of markets including product markets, resource markets, and competitive markets. It describes four types of market structures: monopoly, oligopoly, monopolistic competition, and perfect competition. These are categorized based on the number of firms, level of power, product differentiation, and ease of entry/exit. Perfect competition has many small firms with identical products and free entry/exit. Monopolistic competition has many firms with differentiated products and low barriers to entry. Oligopoly has a few dominant firms with significant control over price. Monopoly has a single firm with no substitutes and high barriers to entry.
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Competitive markets demand and supply
- 1. Demand &SupplyCOMPETITIVE MARKETScreated for:IB Economicsbuilding on the work of:Jason Welker
- 2. The Market
- 3. marketThe Nature of Markets
- 4. a place where buyers and sellers come together and exchange goods &servicesmarketThe Nature of Markets
- 5. like the butcher, the grocerystore, or the internetmarketThe Nature of Markets
- 6. they can be local, national, and also internationalmarketThe Nature of Markets
- 7. they can be local, national, and also internationalmarketCan you give an example of each type of market?The Nature of Markets
- 8. they fall into two categories:productmarketsorresourcemarketmarketThe Nature of Markets
- 9. product marketThe Nature of Markets
- 10. is the purchase of consumer goods & services directly from the producersproduct marketThe Nature of Markets
- 11. product marketlike a computer fromThe Nature of Markets
- 12. product marketor an The Nature of Markets
- 13. product marketfrom a farmerThe Nature of Markets
- 14. resource marketThe Nature of Markets
- 15. is the purchase of the factors of production: land, labor, capital, and entrepreneurship by businesses of individuals and familiesresource marketThe Nature of Markets
- 16. resource marketlike trees from a family owning a forestThe Nature of Markets
- 18. is one with a large numbers of buyers and sellers, limiting the power of a single firmcompetitivemarketsThe Nature of Markets
- 19. they bring about diversity of goods, efficiencies, and a general greater wealthcompetitivemarketsThe Nature of Markets
- 20. markets are “free” when they can openly attempt to win business away from otherscompetitivemarketsThe Nature of Markets
- 22. 4 types of market structure:market structuresThe Nature of Markets
- 23. 4 types of market structure:monopoly| oligopolymonopolistic competition perfect competitionmarket structuresThe Nature of Markets
- 24. 4 types of market structure:monopoly | oligopolymonopolistic competition perfect competitionmarket structuresThe Nature of Markets
- 25. 4 types of market structure:monopoly | oligopolymonopolistic competition perfect competitionmarket structuresThe Nature of Markets
- 26. 4 types of market structure:monopoly | oligopolymonopolistic competition perfect competitionmarket structuresThe Nature of Markets
- 27. 4 criteria are used to categorize# of firms | firm’s level of power | product differentiation between firms | ease of entry and exitmarket structuresThe Nature of Markets
- 28. 4 criteria are used to categorize# of firms | firm’s level of power| product differentiation between firms | ease of entry and exitmarket structuresThe Nature of Markets
- 29. 4 criteria are used to categorize# of firms | firm’s level of power| product differentiation between firms| ease of entry and exitmarket structuresThe Nature of Markets
- 30. 4 criteria are used to categorize# of firms | firm’s level of power| product differentiation between firms|ease of entry and exitmarket structuresThe Nature of Markets
- 31. perfect competitionThe Nature of Markets
- 32. very few firmsperfect competitionThe Nature of Markets
- 33. very few firmsfirms don’t influence supplyperfect competitionThe Nature of Markets
- 34. very few firmsfirms don’t influence supplyfirms make identical productsperfect competitionThe Nature of Markets
- 35. very few firmsfirms don’t influence supplyfirms make identical productsentry & exit easyperfect competitionThe Nature of Markets
- 36. is quite theoretical, though commodities markets(such as corn, wheat, etc.) do come closeperfect competitionThe Nature of Markets
- 37. monopolistic competitionThe Nature of Markets
- 38. many firmsmonopolistic competitionThe Nature of Markets
- 39. many firmsfirm’s decisions barely effect marketmonopolistic competitionThe Nature of Markets
- 40. many firmsfirm’s decisions barely effect marketrelatively different goodsmonopolistic competitionThe Nature of Markets
- 41. relatively low barriers to entrymonopolistic competitionThe Nature of Markets
- 42. monopolistic competitionThe Nature of MarketsCan you give an example of a type of company that would fit this description?
- 43. oligopolyThe Nature of Markets
- 44. few dominant firmsoligopolyThe Nature of Markets
- 45. few dominant firmssignificant control over priceoligopolyThe Nature of Markets
- 46. few dominant firmssignificant control over pricesame or different productsoligopolyThe Nature of Markets
- 47. few dominant firmssignificant control over pricesame or different productsbarrier to entry higholigopolyThe Nature of Markets
- 48. few dominant firmssignificant control over pricesame or different productsbarrier to entry higholigopolyThe Nature of Markets
- 49. oligopolyThe Nature of MarketsWhat real-world firms represent an oligopoly?
- 50. monopolyThe Nature of Markets
- 51. only one firmmonopolyThe Nature of Markets
- 52. only one firmfirm sells to whole marketmonopolyThe Nature of Markets
- 53. only one firmfirm sells to whole marketno substitute products existmonopolyThe Nature of Markets
- 54. only one firmfirm sells to whole marketno substitute products existhigh barrier to entrymonopolyThe Nature of Markets
- 55. market structure & powerThe Nature of Marketsmost market powermonopolyoligopoly competitionleast market powermonopolistic competitionperfect competition