Demand (economics) - Market Structure and The Demand Curve

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:

    But the nomads were the terror of all those whom the soil or the advantages of the market had induced to build towns. Agriculture therefore was a religious injunction, because of the perils of the state from nomadism.
    Ralph Waldo Emerson (1803–1882)

    Agnosticism is a perfectly respectable and tenable philosophical position; it is not dogmatic and makes no pronouncements about the ultimate truths of the universe. It remains open to evidence and persuasion; lacking faith, it nevertheless does not deride faith. Atheism, on the other hand, is as unyielding and dogmatic about religious belief as true believers are about heathens. It tries to use reason to demolish a structure that is not built upon reason.
    Sydney J. Harris (1917–1986)

    It is not enough to demand insight and informative images of reality from the theater. Our theater must stimulate a desire for understanding, a delight in changing reality. Our audience must experience not only the ways to free Prometheus, but be schooled in the very desire to free him. Theater must teach all the pleasures and joys of discovery, all the feelings of triumph associated with liberation.
    Bertolt Brecht (1898–1956)

    The years-heired feature that can
    In curve and voice and eye
    Despise the human span
    Of durance—that is I;
    The eternal thing in man,
    That heeds no call to die.
    Thomas Hardy (1840–1928)