market models
There are four market models: perfect competition, monopolistic competition, oligopoly and monopoly. Briefly discuss the assumptions of each of these four models and give examples of each. Explain the long run economic profit earned by each of the four. Explain how the concept of economic profit might help explain the rationale for the government’s granting of monopolies to those firms that protect their product with a patent.
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Perfect competition model also referred to as pure competition is a model that assumes that the products being offered are identical; customers are aware of these products, no obstacles in market entry and exit and that a single seller‘s decision has no impact on market prices…
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