Ch+7.1

Ch 7. 1 notes and questions

__Perfect Competiton__ __4 conditions for perfect competition__
 * perfect competition- is when the market is one with a large number of firms all producing essentially the same product
 * many buyers and sellers participate in the market
 * sellers offer identical products
 * buyers and sellers are well informed about products
 * sellers are able to enter exit the market freely

__Identical products__ __Barriers to entry__
 * a commodity is a product that is considered the same regardless of who makes or sells
 * examples include low grade gasoline, notebooks, paper, milk
 * barriers to entry are factors that make it difficult for new firms to enter a market
 * imperfect competition is a market structure that does not meet the conditions of perfect competition
 * start ups costs are expenses that a new business must pay before the first product reaches the customer

Questions #1-5
 * 1) perfect competition is really when big companies make similar products, examples are the markets for many farm products
 * 2) i think start up cost discourages entrepreneurs from entering the market because well they have to first spend some of their money to make money and no one really likes to do that
 * 3) 2 good examples of barriers to entry in the magazine market are probably an advertisement magazine and a new fashion magazine because well they have to popular and people have to like them
 * 4) perfect competitive markets always deal in commodities because lower companies will always try to make a similar product to those of the big companies such as a tv or car or even a hamburger.
 * 5) i think that all the above come close of perfect competition, tv, bottled water, pizza, school buses, white socks, white socks, baseballs and paperclips