Perfect competition



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Monopoly

Monopoly A presentation by Anamitra Roy

Imperfect Markets

  • Imperfect competition is an industry in which single/few firms have some control over price and competition.
  • Imperfectly competitive industries give rise to an inefficient allocation of resources.

Imperfect Markets

  • In all imperfectly competitive industries, output is lower—the product is under produced—and price is higher than it would be under perfect competition.
    • The equilibrium condition P=MC does not hold, and the system does not produce the most efficient product mix.

Public Goods

  • Public goods, or social goods are goods and services that bestow collective benefits on members of society.
    • Generally, no one can be excluded from enjoying their benefits. The classic example is national defense.

Private Goods

  • Private goods are products produced by firms for sale to individual households.
    • Private provision of public goods fails. A completely laissez-faire market will not produce everything that all members of a society might want. Citizens must band together to ensure that desired public goods are produced, and this is generally accomplished through government spending financed by taxes.

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