A different market structure and demand curve.

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Chapter 14, Problem 14.3CTE

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A different market structure and demand curve.

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Market Structures... Economists try to identify market structures in order to understand how firms and consumers behave. We characterize market structures by the number of buyers or sellers who are present, by the relative ease with which a new seller may enter the market, by the variation in the product from one supplier to the next, and by the amount of competition present. Perfect Competition Perfect competition is the most competitive market structure. A market with perfect competition has a large number of buyers and sellers. In this type of market, there are no barriers to entry or exit, which means a new seller will have a fairly easy time if he wants to start doing business. The product is homogeneous, in the sense that one bushel of wheat isn't really all that different from any other bushel of wheat. A perfectly competitive market is also characterized by the availability of perfect information, or free and equal access for everyone to information about the product, its…