Economics Unit 2 (Microeconomics)

Perfect Competition

• ·       Many Sellers

  ·       Identical Products

  ·       Price Taker

  ·       Perfectly Elastic

  ·       No Advertising

  ·       No Barriers for Entry

  Easy to Enter

• ·       Imperfect Competition

  ·       Many Sellers

  ·       Similar Products

  ·       Price Searcher

  ·       Downward Sloping

  ·       Local Advertising

  ·       Slight Barriers for Entry

  ·       Easy to Enter

• ·       Imperfect Competition

  ·       Few Sellers

  ·       Differentiated Products

  ·       Price Searcher

  ·       Downward Sloping

  ·       National  Advertising

  ·       High Barriers for Entry

  ·       Not Easy to Enter

• ·       Imperfect Competition

  ·       One group of Sellers

  ·       No Similar or Identical Product

  ·       Price Searcher

  ·       Downward sloping

  ·       No Advertising

  ·       High Barriers For Entry

  ·       Not Easy to Enter

Monopolistic Competition

• ·       Imperfect Competition

  ·       One Seller

  ·       No Similar or Identical Products

  ·       Price Searcher

  ·       Downward Sloping

  ·       No Advertising

  ·       High Barriers for Entry

  ·       Not Easy to Enter

• ·       Imperfect Competition

  ·       Few Sellers

  ·       Differentiated Products

  ·       Price Searcher

  ·       Downward Sloping

  ·       National  Advertising

  ·       High Barriers for Entry

  ·       Not Easy to Enter

• ·       Imperfect Competition

  ·       Many Sellers

  ·       Similar Products

  ·       Price Searcher

  ·       Downward Sloping

  ·       Local Advertising

  ·       Slight Barriers for Entry

  Easy to Enter

• ·       Imperfect Competition

  ·       One group of Sellers

  ·       No Similar or Identical Product

  ·       Price Searcher

  ·       Downward sloping

  ·       No Advertising

  ·       High Barriers For Entry

  ·       Not Easy to Enter

Oligopoly

• ·       Many Sellers

  ·       Identical Products

  ·       Price Taker

  ·       Perfectly Elastic

  ·       No Advertising

  ·       No Barriers for Entry

  ·       Easy to Enter

• ·       Imperfect Competition

  ·       Few Sellers

  ·       Differentiated Products

  ·       Price Searcher

  ·       Downward Sloping

  ·       National  Advertising

  ·       High Barriers for Entry

  Not Easy to Enter

• ·       Imperfect Competition

  ·       One Seller

  ·       No Similar or Identical Products

  ·       Price Searcher

  ·       Downward Sloping

  ·       No Advertising

  ·       High Barriers for Entry

  ·       Not Easy to Enter

• ·       Imperfect Competition

  ·       One group of Sellers

  ·       No Similar or Identical Product

  ·       Price Searcher

  ·       Downward sloping

  ·       No Advertising

  ·       High Barriers For Entry

  ·       Not Easy to Enter

Cartel

• ·       Imperfect Competition

  ·       One Seller

  ·       No Similar or Identical Products

  ·       Price Searcher

  ·       Downward Sloping

  ·       No Advertising

  ·       High Barriers for Entry

  ·       Not Easy to Enter

• ·       Imperfect Competition

  ·       Many Sellers

  ·       Similar Products

  ·       Price Searcher

  ·       Downward Sloping

  ·       Local Advertising

  ·       Slight Barriers for Entry

  ·       Easy to Enter

• ·       Imperfect Competition

  ·       Few Sellers

  ·       Differentiated Products

  ·       Price Searcher

  ·       Downward Sloping

  ·       National  Advertising

  ·       High Barriers for Entry

  ·       Not Easy to Enter

• ·       Imperfect Competition

  ·       One group of Sellers

  ·       No Similar or Identical Product

  ·       Price Searcher

  ·       Downward sloping

  ·       No Advertising

  ·       High Barriers For Entry

  ·       Not Easy to Enter

Price Searchers have control of the market they are involved in.

• True

• False

Price Takers have control of they market they are involved in.

• True

• False

Sole Proprietorship

• ·       Separate, legal entity with a Board of Directors

  ·       Limited Liability

  ·       Unlimited life even if owner quits or dies

  ·       Ownership is easy to transfer

  ·       Lots more capital

  ·       Expensive to establish

  ·       Taxed twice (profits & dividends)

• ·       Simple to establish

  ·       Most common form of business

  ·       All profits belong to one person

  ·       Unlimited Liability

  ·       Can’t do everything on your own

• ·       2+ people share management and profits

  ·       Slightly more capital

  ·       More ideas

  ·       Unlimited Liability

  ·       Quits or dies, partnership dissolves

  ·       Arguments may occur

Partnership

• ·       2+ people share management and profits

  ·       Slightly more capital

  ·       More ideas

  ·       Unlimited Liability

  ·       Quits or dies, partnership dissolves

  ·       Arguments may occur

• ·       Separate, legal entity with a Board of Directors

  ·       Limited Liability

  ·       Unlimited life even if owner quits or dies

  ·       Ownership is easy to transfer

  ·       Lots more capital

  ·       Expensive to establish

  ·       Taxed twice (profits & dividends)

• ·       Simple to establish

  ·       Most common form of business

  ·       All profits belong to one person

  ·       Unlimited Liability

  ·       Can’t do everything on your own

Corporation

• ·       2+ people share management and profits

  ·       Slightly more capital

  ·       More ideas

  ·       Unlimited Liability

  ·       Quits or dies, partnership dissolves

  ·       Arguments may occur

• ·       Simple to establish

  ·       Most common form of business

  ·       All profits belong to one person

  ·       Unlimited Liability

  ·       Can’t do everything on your own

• ·       Separate, legal entity with a Board of Directors

  ·       Limited Liability

  ·       Unlimited life even if owner quits or dies

  ·       Ownership is easy to transfer

  ·       Lots more capital

  ·       Expensive to establish

  ·       Taxed twice (profits & dividends)

Law of Demand

• 
• 
• As price goes up, quantity demanded goes down. As price goes down, quantity demanded goes up.

• As price goes up, quantity supplied goes up. As price goes down, quantity supplied goes down.