PowerPoint Presentation Competition, Market Structures, and the Role of Government



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Market Structure presentation

Competition and Market Structures

What is a market?

  • any structure that allows buyers and sellers to exchange any type of goods, services and information.
  • The exchange of goods or services, with or without money, is a transaction

Market Structures

  • What is the primary aim/goal of businesses?
    • To maximize profits
    • This goal can motivate companies to eliminate competition, increase prices and lower quality of products.

Market Structures

  • What is competition?
    • Striving against others to reach an objective
    • The government attempts to maintain competition in the market to insure low prices and high quality of products
    • Antitrust laws are in place to stop monopoly power

4 Types of Competition

  • Perfect Competition
    • Pure Competition
  • Imperfect Competition
    • Monopolistic Competition
    • Oligopoly
    • Monopoly

Pure/Perfect Competition

  • Pure/Perfect Competition
    • Doesn’t really exist (theoretical)
    • Large number of buyers and sellers
    • Identical product
    • Well informed buyers and sellers
    • *Agricultural or Produce products (closest to theoretical)
    • Grown or raised on farms

All other forms of competition are imperfect competition

  • imperfect means the products are slightly different

Monopolistic Competition

  • Lots of buyers and sellers who are well informed, but products are slightly different.
  • Monopolistic competitors use non-price competition
    • Advertising, giveaways, or other promotions
  • More Competition Less Competition
  • Fast food industry is an example

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