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
Famous quotes containing the words market, structure, demand and/or curve:
“... married women work and neglect their children because the duties of the homemaker become so depreciated that women feel compelled to take a job in order to hold the respect of the community. It is one thing if women work, as many of them must, to help support the family. It is quite another thing—it is destructive of woman’s freedom—if society forces her out of the home and into the labor market in order that she may respect herself and gain the respect of others.”
—Agnes E. Meyer (1887–1970)
“The philosopher believes that the value of his philosophy lies in its totality, in its structure: posterity discovers it in the stones with which he built and with which other structures are subsequently built that are frequently better—and so, in the fact that that structure can be demolished and yet still possess value as material.”
—Friedrich Nietzsche (1844–1900)
“The demand to be loved is the greatest of all arrogant presumptions.”
—Friedrich Nietzsche (1844–1900)
“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)