Differences in tastes, desires, incomes and locations of buyers, and differences in the use.
which they wish to make of commodities all indicate the need for variety and the.
necessity of substituting for the concept of a "competitive ideal,"" an ideal involving both.
monopoly and competition.
Edward Chamberlin.
e have so far considered two distinctly different market structures: perfect.
competition, characterized by producers that cannot influence price at all.
because of extreme competition; and pure monopoly, in which there is only.
one producer of a product with no close substitutes and whose market is protected by.
prohibitively high barriers to entry. Needless to say, most markets are not well described.
by either of those theoretical structures. Even in the short run, producers typically.
compete with several or many other producers of similar, if not identical, products.
General Motors Corporation competes with Ford Motor Company, Chrysler Corporation,.
and a large number of foreign producers. McDonald's Corporation competes with.
Burger King Corporation, Hardees, and a lot of other burger franchises, as well as with.
Pizza Hut, Popeye's Fried Chicken, and Long John Silver's. People's Drug stores.
compete directly with other drug chains and locally owned drugstores, and indirectly with.
department and discount stores that sell the same non-drug products. In the long run, all.
these firms must compete with new companies that surmount the imperfect barriers to.
entry into their markets. In short, most companies competing in the imperfect markets.
can cause producers to be more efficient in their use of resources than under pure.
monopoly, although less efficient than in perfect competition. One word of caution,.
however: The study of so-called real-world market structures can be frustrating.
Although models may incorporate more or less realistic assumptions about the behavior.
of real-world firms, the theories developed from them are conjectural.
