1. Chapter #7 EDWARD BAHAW - Economic Principles and Their Application to Business (ABE) Market Structure: Perfect Competition and Monopoly

2. Market Structure EDWARD BAHAW - Economic Principles and Their Application to Business (ABE) Type of Competition Number of Sellers Barriers to Entry and Exit Profit Nature of Product Pricing Perfect Competition Infinite number No Normal Homogenous Price Taker Monopolistic Competition Many No Normal Non - Homogenous Price Setter Oligopoly Few Yes Abnormal Non - Homogenous Price Setter Monopoly One Yes Abnormal No close substitute Price Setter

4. Average Revenue & Marginal Revenue EDWARD BAHAW - Economic Principles and Their Application to Business (ABE)

5. EDWARD BAHAW - Economic Principles and Their Application to Business (ABE) Price setter: Monopoly Price Quantity TR AR MR 30 5 150 30 25 15 375 25 22.5 20 25 500 20 12.5 15 35 525 15 2.5 10 45 450 10 -7.5 5 55 275 Price taker: Perfect Competition Price Quantity TR AR MR 20 4 80 20 20 15 300 20 20 20 25 500 20 20 20 35 700 20 20 20 45 900 20 20 20 55 1100

6. Average and Marginal Revenue Q $ AR MR P Q $20 O Perfect Competition Monopoly AR = MR EDWARD BAHAW - Economic Principles and Their Application to Business (ABE)

7. Cost Curves Quantity MC AC Q O O Cost ($) EDWARD BAHAW - Economic Principles and Their Application to Business (ABE)

8. Perfect Competition Q MC AC MR E Q O MR =MC O P P Cost/Price ($) AR = EDWARD BAHAW - Economic Principles and Their Application to Business (ABE)

9. Monopoly Q MC AC AR MR Q E E Q O MR =MC O P Cost/Price ($) AC EDWARD BAHAW - Economic Principles and Their Application to Business (ABE)