Name the market structure (Perfect Competition, Imperfect Competition or Monopoly) to which each statement below applies:
(i) Product differentiation exists
(ii) Products are homogeneous/identical
(iii) Firm has complete control over price or output - Leaving Cert Economics - Question 3 - 2010
Question 3
Name the market structure (Perfect Competition, Imperfect Competition or Monopoly) to which each statement below applies:
(i) Product differentiation exists
(ii) P... show full transcript
Worked Solution & Example Answer:Name the market structure (Perfect Competition, Imperfect Competition or Monopoly) to which each statement below applies:
(i) Product differentiation exists
(ii) Products are homogeneous/identical
(iii) Firm has complete control over price or output - Leaving Cert Economics - Question 3 - 2010
Step 1
Product differentiation exists
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Answer
This statement pertains to 'Imperfect Competition'. In this market structure, firms offer products that are differentiated from one another, giving them some degree of pricing power.
Step 2
Products are homogeneous/identical
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Answer
This statement refers to 'Perfect Competition'. In such a market, all firms sell identical or homogeneous products, leading to no pricing power for individual sellers.
Step 3
Firm has complete control over price or output
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Answer
This statement defines 'Monopoly'. In a monopolistic market, a single firm dominates the market and has significant control over the prices it sets for its products or services.
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