Foundations of Economics, 8th Edition

Market Types

MyEconLab Concept Video

The four market types are

• Perfect competition

• Monopoly

• Monopolistic competition

• Oligopoly

Perfect Competition

Perfect competition exists when

Perfect competition

A market in which there are many firms, each selling an identical product; many buyers; no barriers to the entry of new firms into the industry; no advantage to established firms; and buyers and sellers are well informed about prices.

• Many firms sell an identical product to many buyers.

• There are no barriers to entry into (or exit from) the market.

• Established firms have no advantage over new firms.

• Sellers and buyers are well informed about prices.

These conditions that define perfect competition arise when the market demand for the product ...