Market Structure and The Demand Curve
In perfectly competitive markets the demand curve, the average revenue curve, and the marginal revenue curve all coincide and are horizontal at the market-given price. The demand curve is perfectly elastic and coincides with the average and marginal revenue curves. Economic actors are price-takers. Perfectly competitive firms have zero market power; that is, they have no ability to affect the terms and conditions of exchange. A perfectly competitive firm's decisions are limited to whether to produce and if so, how much. In less than perfectly competitive markets the demand curve is negatively sloped and there is a separate marginal revenue curve. A firm in a less than perfectly competitive market is a price-setter. The firm can decide how much to produce or what price to charge. In deciding one variable the firm is necessarily determining the other variable
Read more about this topic: Demand (economics)
Famous quotes containing the words market, structure, demand and/or curve:
“It is a sign of our times, conspicuous to the coarsest observer, that many intelligent and religious persons withdraw themselves from the common labors and competitions of the market and the caucus, and betake themselves to a certain solitary and critical way of living, from which no solid fruit has yet appeared to justify their separation.”
—Ralph Waldo Emerson (1803–1882)
“Women over fifty already form one of the largest groups in the population structure of the western world. As long as they like themselves, they will not be an oppressed minority. In order to like themselves they must reject trivialization by others of who and what they are. A grown woman should not have to masquerade as a girl in order to remain in the land of the living.”
—Germaine Greer (b. 1939)
“We now demand the light artillery of the intellect; we need the curt, the condensed, the pointed, the readily diffused—in place of the verbose, the detailed, the voluminous, the inaccessible. On the other hand, the lightness of the artillery should not degenerate into pop-gunnery—by which term we may designate the character of the greater portion of the newspaper press—their sole legitimate object being the discussion of ephemeral matters in an ephemeral manner.”
—Edgar Allan Poe (1809–1845)
“And out again I curve and flow
To join the brimming river,
For men may come and men may go,
But I go on forever.”
—Alfred Tennyson (1809–1892)