Perfect competition

1. Many buyer and sellers in the market 2. Sellers offer identical products 3. Buyers and sellers are well informed about the product 4. Sellers are able to to enter and exit the market freely

Expenses a new business has to pay before the first product reaches the consumer

Factors that make it difficult for new firms to enter a market

A product that is considered the same regardless of who makes or sells it such as milk

A market with many well informed buyers and sellers, identical products, and free exit and entry

So that no individual can control the price

It's the same product no matter who makes it

Markets with high start up costs are less likely to be perfectly competitive

Efficiency

Each firm adjusts it's output so that it's cost, including profit, are covered

Barriers keep companies from entering the market freely

Single seller in a market

A producers average cost drops as production rises

A company had exclusive rights to sell a new good or service for a specific time period

A single seller has the rights to sell goods in an exclusive market

Consumers are divided into groups and each is charged differently

An industry that runs best when one firm produces all output

Keep tram play orderly and stable

Vacationers are willing to put up with the restrictions that the airlines impose

Encourage firms to research and develop new products

The price at which the profit is maximized

1. Many firms 2. Few artificial barriers to entry 3. Slight control over price 4. Differentiated products, differentiation is making a product different from other similar products

1. Physical characteristics such as size or taste or color 2. Location 3. Service level get what you pay for 4. Advertising image or status

Many company's in an open market selling similar products

A market structure dominated by a few large profitable firms

An agreement among firms to sell at the same or very similar prices

Non price competition

Collusion

Higher than in perfect competition

Established rivals and new firms would lure costumers away with slightly different and or cheaper products

Every member keeps to the agreed output levels

In a monopolistic competition sellers can profit from the differences between their products and other products