Market Structures Intro
Market structures characterise how some markets behave. They are:
As well as an alternative model: Contestable Markets
Common topics
Barriers to entry
Barriers to entry are factors that prevents new entrants into a marketplace.
Examples:
- Economies of Scale, e.g Marketing
- Strong Branding
- Scope of products
- High start-up costs
- Technology / Capital
- High market share
- Copyright / patents / trademarks
Profit Maximisation
This means firms try to maximise profit. This point is at MR=MC
Efficiency
Static efficiency
Efficiency at a particular point in time (productive and allocative)
Dynamic Efficiency
Requires SNP in LR - Monopoly, Oligopoly
The development of new products and more efficient processes that improve productive efficiency in the LR.