Index
Introduction - 1
Defining A Market - 2
The Importance Of Competition - 3
The Result Of Competition - 4
Intervening In Markets - 5
The Allocative Role - 6
The Distributive Role - 7
The Regulative Role - 8
The Regulative Role (continued) - 9
The Role Of Government - 10
The Role of Government (continued) - 11
The Stabilizing Role - 12
Vertical and Horizontal Integration Defined - 13
Defining Market Structure - 14
How A Firm Can Grow - 15
Mergers and Takeovers - 16
Vertical And Horizonal Integration (Diagram) - 17
Why markets Vary in Structure - 18
Product Differentiation - 19
Product Differentiation (continued) - 20
Free Range ''Googs''- 21
Product Differentiation (continued) - 22
Non Price Competition - 23
Non Price Competition (continued) - 24
Defining The Types Of Market Structures - 25
Perfect Competition - 26
Perfect Competition (continued) - 27
The Market For Oranges - 28
The Market For Oranges (continued) - 29
Bitter Oranges - 30
Summary: Perfect Competition - 31
Monopolistic Competition - 32
True Blue Oranges - 33
Monopolistic Competition (continued) - 34
Oligopoly - 35
Oligopoly (continued) - 36
Oligopoly (continued) - 37
Kinked Demand Curves - 38
OPEC - 39
OPEC (continued) - 40
Monopoly - 41
Microsoft - 42
Why Monopolies Are Inefficient - 43
Revision Questions On Market Forms - 44

Perfect Competition - 26
Perfect Competition is an ideal; there are few markets that are perfectly competitive. However, the Adelaide Central Market shows many of the characteristics of a perfectly competitive market.

[The Adelaide Central Market is situated in the centre of the city of Adelaide. There are a large number of stall holders and small shops, where one can buy a wide range of fresh fruit and vegetables, coffees, nuts, cheeses and ''smallgoods''. In addition, one can buy a wide range of ''speciality goods such as ''Asian'' foods and ''Continental'' delicacies. A great place to visit on Saturday morning to shop and to have a cup of coffee afterwards.]

In a perfectly competitive market we typically find many buyers and sellers of a product. Each individual player in the market is relatively small and can not influence the market, as a whole. Firms in such markets are ''price takers''.

In the Adelaide Central Market, you will find that many stalls will have the same price for many vegetables of the same quality. This is not because the stall holders have got together before trading and ''fixed'' prices. Customers will compare prices as they walk by, and will buy from the stall with the cheapest prices (for a given quality of produce). Stall holders who have initially set prices at a higher level will soon notice they are making few sales, and they will quickly reduce their prices. A ''market'' equilibrium price will soon develop (pun intended!).

In such a perfectly competitive market, the product is seen by consumers as ''homogeneous''; there is no difference in quality of product, if we buy from firm A or firm B.

[In the Adelaide Central Market, unblemished Roma tomatoes, for example, have the same price from stall to stall.

You can buy cheaper tomatoes; but look at them closely, and give them a squeeze. These tomatoes are less firm, and may have bruise marks on them. They are not ''homogeneous'' with other Roma tomatoes.]