1. Market Structures and Measuring the Economy
Goals:
Describe the conditions required for Perfect Competition.
2. Analyze non-price competition between firms in
Monopolistic Competition.

2. Market Structures
Classification of the market according to #of firms, types of products, and type of competition There are 4 Different types of Markets: -Perfect Competition -Monopolistic Competition -Oligopoly -Monopoly

3. Perfect Competition
-Market structure where many well informed buyers and sellers exchange identical products
Necessary Conditions
Many buyers and sellers
Identical Products
Pure Competition (Buyers & Sellers act independently)
Well-Informed Buyers and Sellers
No/Low Barriers (Easy for Buyers and Sellers to engage)

4. Monopolistic Competition
Many companies competing in an open market with similar but not identical products. Each company has a mini monopoly over its specific product, but there are other products that could be reasonable substitutes.

5. Conditions of Mono. Comp.
Monopolistic Competition relies on product differentiation – real or imagined differences between competing products. These product differences in addition to non-price competition allow for a wide variety of choices and prices.

6. Non-Price Competition
Competition through ways other than lower prices
Physical characteristics-new size, color, shape etc.
2. Location- where a business is located can have a big effect on competition
3. Service Level- how much service/attention is given to customers
4. Advertising, Image or Status – perception and social value