Theory of the Firm
- Created by: Chloe Budd
- Created on: 28-05-14 14:54
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- Theory of the firm
- Perfect Competition
- Many small firms
- Homogeneous goods
- Perfect knowledge
- No barriers to entry
- No price setting power
- Monopolistic Competition
- Many small firms
- Similar goods
- Imperfect knowledge
- Low barriers to entry
- Can set price to an extent
- Oligopoly
- A few large firms
- Goods with similar charecteristics
- Imperfect knowledge
- High entry barriers
- Tend to agree price fixing deals
- Monopoly
- One firm
- Unique products
- Imperfect knowledge
- High entry barriers
- Price makers
- Contestable Markets
- No sunk costs
- Low entry barriers
- Monopsony
- Powerful buyer
- Many sellers
- Perfect Competition
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