Although a monopolistically competitive economy yields inefficient equilibrium resource allocations, key features of the business cycle are not significantly different from those of a perfectly competitive
Given a level of medical care chosen by the insured according to (4) and assuming a perfectly competitive
health insurance market, the principal (the insurer) maximizes the expected utility of the insured subject to the zero-profit insurance policy constraint, which also incorporates the utility-maximizing medical care schedule.
When the downstream merchants are perfectly competitive
(Scenario 1), or when the merchants are monopolies but their market power for excessively pricing to card customers is constrained (Scenario 2), the vertical system ends up with one monopoly-the card network.
Paradoxically, monopolized markets can be more creative, competitive, and welfare enhancing than the most perfect of perfectly competitive
Now assume a perfectly competitive
market, and let the parties to a bargain be S, a plaintiff-seller, and B, a defendant-buyer.
In the perfectly competitive
model, all market participants are equally informed regarding the decisions of the other market participants.
(31.) Perfectly competitive
markets are typically characterized by
In the standard model of monopsony, the supply side of a market is perfectly competitive
and is represented by an upward-sloping supply curve.
Most firms engaged in international trade do not conform closely with the economists' ideal of being perfectly competitive
. Firms exporting to the United States typically can mark up their homes-currency prices above their marginal costs and earn significant economic profits.
This theorem holds for the general design--location problem under the assumption that both input markets are perfectly competitive
. However, if one of the input markets has monopsony power, this theorem may become invalid.
Mulligan and Tsui present a theory of competition for political leadership between incumbent leaders and their challengers in which the possible equilibrium political market structures range from pure monopoly (unchallenged dictatorship) to perfectly competitive
When markets are perfectly competitive
and prices are flexible, prices are always equal to the marginal cost of production.