Definition: It's an ideal model, there's
a free game of supply and demand
and aims to strike a balance
Short term
Non-modifiable conditions and situations
Fixed number of companies
Long term
If there are benefits, it means that
there will be a high supply, so
prices will fall
If there are losses, the structure of the
company will be modified, shifting supply
to the left, causing losses to cease to exist,
and the equilibrium price to rise.
Assumptions
The number of buyers and sellers is high
Freedom to enter and exit the market, i.e. an open market
Homogeneous product
Knowledge of how the market works
Functioning
Marginal revenue must be equal to
marginal cost, therefore, production
will have to increase.
Imperfect competition market
Monopoly
Definition: Market
structure in which there is
only one firm that
dominates production
Characteristics
Demand function with negative slope
Freedom to set prices
Price-elasticity of finite demand, as
they are the only supplier, they have no
other option than to adapt to the price
they set
If it is sold in greater quantity,
the price must be reduced.
Price is greater than
marginal revenue
In monopoly there is
no supply function.
Functioning
It will be necessary to produce a quantity
such that its marginal revenues are equal
to its marginal costs.