1. Demand &Supply COMPETITIVE MARKETS created for: IB Economics building on the work of: Jason Welker

2. The Market

3. market The Nature of Markets

4. a place where buyers and sellers come together and exchange goods &services market The Nature of Markets

5. like the butcher, the grocerystore, or the internet market The Nature of Markets

6. they can be local, national, and also international market The Nature of Markets

7. they can be local, national, and also international market Can you give an example of each type of market? The Nature of Markets

8. they fall into two categories: productmarketsor resourcemarket market The Nature of Markets

9. product market The Nature of Markets

10. is the purchase of consumer goods & services directly from the producers product market The Nature of Markets

11. product market like a computer from The Nature of Markets

12. product market or an The Nature of Markets

13. product market from a farmer The Nature of Markets

14. resource market The Nature of Markets

15. is the purchase of the factors of production: land, labor, capital, and entrepreneurship by businesses of individuals and families resource market The Nature of Markets

16. resource market like trees from a family owning a forest The Nature of Markets

17. CompetitiveMarkets

18. is one with a large numbers of buyers and sellers, limiting the power of a single firm competitivemarkets The Nature of Markets

19. they bring about diversity of goods, efficiencies, and a general greater wealth competitivemarkets The Nature of Markets

20. markets are “free” when they can openly attempt to win business away from others competitivemarkets The Nature of Markets

21. Market Structures

22. 4 types of market structure: market structures The Nature of Markets

23. 4 types of market structure: monopoly| oligopolymonopolistic competition perfect competition market structures The Nature of Markets

24. 4 types of market structure: monopoly | oligopolymonopolistic competition perfect competition market structures The Nature of Markets

25. 4 types of market structure: monopoly | oligopolymonopolistic competition perfect competition market structures The Nature of Markets

26. 4 types of market structure: monopoly | oligopolymonopolistic competition perfect competition market structures The 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 exit market structures The 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 exit market structures The 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 exit market structures The 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 exit market structures The Nature of Markets

31. perfect competition The Nature of Markets

32. very few firms perfect competition The Nature of Markets

33. very few firms firms don’t influence supply perfect competition The Nature of Markets

34. very few firms firms don’t influence supply firms make identical products perfect competition The Nature of Markets

35. very few firms firms don’t influence supply firms make identical products entry & exit easy perfect competition The Nature of Markets

36. is quite theoretical, though commodities markets(such as corn, wheat, etc.) do come close perfect competition The Nature of Markets

37. monopolistic competition The Nature of Markets

38. many firms monopolistic competition The Nature of Markets

39. many firms firm’s decisions barely effect market monopolistic competition The Nature of Markets

40. many firms firm’s decisions barely effect market relatively different goods monopolistic competition The Nature of Markets

41. relatively low barriers to entry monopolistic competition The Nature of Markets

42. monopolistic competition The Nature of Markets Can you give an example of a type of company that would fit this description?

43. oligopoly The Nature of Markets

44. few dominant firms oligopoly The Nature of Markets

45. few dominant firms significant control over price oligopoly The Nature of Markets

46. few dominant firms significant control over price same or different products oligopoly The Nature of Markets

47. few dominant firms significant control over price same or different products barrier to entry high oligopoly The Nature of Markets

48. few dominant firms significant control over price same or different products barrier to entry high oligopoly The Nature of Markets

49. oligopoly The Nature of Markets What real-world firms represent an oligopoly?

50. monopoly The Nature of Markets

51. only one firm monopoly The Nature of Markets

52. only one firm firm sells to whole market monopoly The Nature of Markets

53. only one firm firm sells to whole market no substitute products exist monopoly The Nature of Markets

54. only one firm firm sells to whole market no substitute products exist high barrier to entry monopoly The Nature of Markets

55. market structure & power The Nature of Markets most market power monopoly oligopoly competition least market power monopolistic competition perfect competition