Market types - created from Mind Map

Seite 1

perfect competition

Perfect competition

The monopoly

Oligopoly

It is based on

The free game of supply and demand

Based on the free game of supply and demand

The tendency is to achieve equilibrium

The number of buyers and sellers in the market is high.

There is freedom to enter and exit the market.

Profits

If the price is lower than the equilibrium price

If the price is higher than the equilibrium

prices will go up

Prices will drop

Difference between total revenue and total

Origin

Features

Regulation

Control of a productive factor

The existence of tax monopolies

Legal barriers to entry

The existence of very high fixed costs

Downward sloping demand

Monopolies are price-bidders

The monopolist's price elasticity of demand is finite

They can use both price and quantity as an adjustment variable.

To sell a larger quantity, a monopolist must reduce its price.

For a monopolist, the price is greater than the marginal revenue

Price setting according to the average cost rule.

Pricing according to the marginal cost rule.

it is a type of market in which there are few companies

Features

Collusion and competition

interdependence between decisions

Existence of entry barriers

Long-term benefits

You have to assess the reactions of other companies when making a decision

Agreement to set prices, production quotas, level of advertising expenses, etc.