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- Perfect Competition- A bustling marketplace with identical fruit stands all selling apples.
- Same here! We all just match the market price
- One dollar for an apple! I can’t charge more, or no one will buy from me
- Monopolistic Competition- A row of clothing stores, each with unique branding and designs.
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- In perfect competition, firms are price-takers with no influence on price; they compete purely on efficiency.
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- Our tees have eco-friendly material—slightly more, at $30.”
- We sell vintage-inspired styles! Just $25 for a tee.
- I like the look and feel here, even if it’s pricier.
- Oligopoly- Two airline CEOs shaking hands with tense smiles as they see a third CEO looking over their shoulders.
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- In monopolistic competition, brands differentiate products, allowing firms to charge higher prices due to consumer preferences.
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- (thinking) I’ll match their price, but I have to watch them closely.
- If we lower prices too much, a price war will break out.
- Agreed. Let’s keep prices stable so we don’t hurt each other.
- Monopoly- A utility company CEO in front of a huge factory, looking smug. A customer, responding,
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- In an oligopoly, a few large firms dominate, watching each other’s moves closely to avoid intense competition.
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- We don’t have any other options. We just have to pay.
- As the only power provider, we control the prices. Higher rates mean higher profits.
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- In a monopoly, one firm controls the market, setting prices with little concern for competition.
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- Monopsony- A factory in a small town, with workers in an assembly line.
- Since they’re the only employer in town, we can’t negotiate higher wages.
- They control the labor market here, so we’re stuck with what they offer.
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- In a monopsony, one buyer has significant power over many sellers, often pushing prices or wages down.
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