Part II Product and Factor Markets This overview of
product and factor markets,
while written for the beginning
student, will be
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I. Introduction
A. Part II investigates the many individual
markets that
exist in a market economy. |
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II. Product market models
Model Characteristic |
Pure Competition |
Monopolistic Competition |
Oligopoly |
Monopoly |
Number of companies |
Infinite |
Many |
Few |
One |
Similarity of product |
Identical |
Different |
Standardized or |
Not Applicable |
Ease of new firm entry |
Very Easy |
Relatively Easy |
Very Difficult |
Not Possible |
Control over price |
None |
Some |
Interdependent |
Substantial |
Non-Price competition (Advertising) |
Industrial |
Substantial emphasizing product differentiation |
More for Consumer than Industrial Goods |
Good Will Advertising |
Examples |
Agriculture |
Clothes |
Autos and Steel |
Utilities |
Note: A product's characteristics
determine its elasticity of demand.
III. Factor market models A. Factors
(economic resources) are used to make
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C. Economic concerns to be evaluated when analyzing factor markets include:
1. Amount and proportion of factors hired
2. Amount and distribution of factor income
3. Economic efficiency of different models
Go to Economics 23 Pure Competition
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