Ranking the types of markets from most competitive to least competitive:II. Competition and PricesWhen it comes to setting price:A firm in a
must simply accept the market price as given.- many, many other firms- selling the same product- new firms can enter at willA firm in this type of market is a ³________________________´.A
can determine what price to charge for their good, but they keep in mind:- face competition from similar products- consumers¶ willingness to payEx: Dove can set the price for its body wash « but it can¶t control the price for body wash ingeneral.In an
, the ability to set price depends on the type of good being sold.ex: oil has one priceex: car makers can set prices for different modelsBecause there are only a few firms in an oligopoly market, strategy is incredibly important.A
can determine what price to charge for its good because it faces no competition.³price maker´ ³price setter´A monopolist, however, can¶t set the price infinitely high.- can only set it as high as demand will allowThe level of competition would suggest to us that the type of market structure would impact ________________________________________________.a. A firm in a competitive market will have more elastic demand than a monopoly market.
- many close substitutes in competitive market- no substitutes in monopoly market