tailieunhanh - Ebook Principles of microeconomics (7th edition): Part 2

(BQ) Part 2 book "Principles of microeconomics" has contents: Identifying markets and market structures; price and output in monopoly, monopolistic competition, and perfect competition; perfect competition under oligopoly; under oligopoly; externalities, market failure, and public choice; and public choice,.and other contents. | Find more at C H A P T E R IDENTIFYING MARKETS AND MARKET STRUCTURES 10 . T o market, to market To buy a fat pig Home again, home again Jiggety-jig TO THE ECONOMIC PRINCIPLES ASSOCIATED WITH: * The use of cross elasticity to define markets * The relationship between firms, industries, and markets * Market structures * The characteristics of monopoly * The characteristics of monopolistic competition * The characteristics of perfect competition * The role of advertising © Royalty-Free/CORBIS Is the nursery rhyme familiar? Think back! Even as a little child, you were already acquainted with markets. And the nursery rhyme makes it very clear that markets are where you buy fat pigs. What the nursery rhyme does not tell you, however, is the price you pay for fat pigs. It doesn’t tell you whether goods are available to substitute for fat pigs, or whether the market’s structure is a monopoly, an oligopoly, perfect or monopolistic competition. Perhaps that is asking too much. This chapter and the two following go beyond the nursery rhyme. In this chapter we identify which goods belong to which markets and how these markets differ. The following two chapters analyze how prices are determined in these monopoly, oligopoly, perfectly competitive and monopolistically competitive markets. THIS CHAPTER INTRODUCES YOU Copyright 2012 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. 224 PART 3 Find more at THE MICROECONOMICS OF PRODUCT MARKETS DEFINING THE RELEVANT MARKET Is a Rose Is a Rose Is a Rose? Relevant market The set of goods whose cross elasticities with others in the set are relatively high and whose cross elasticities with goods outside the set are relatively low. When Gertrude Stein wrote her celebrated line “Rose is a rose is a rose