Economics: Today and Tomorrow © 2008
Competition and Monopolies
Section 1: Perfect Competition
Competition happens when two or more companies strive against each other to convince consumers to buy their products or services. Chapter 9 explores the effects of competition and market structure on the American economy. Competition, one of the basic characteristics of a market economy, provides consumers with choices and leads to lower prices. Market structure is the amount of competition that a business faces.
Section 2: Monopoly, Oligopoly, Monopolistic Competition
Most industries in the United States, in contrast, represent some form of imperfect competition. Economists classify these three types of imperfect market structures as monopoly, oligopoly, or monopolistic competition. For each market structure, the chapter defines its characteristics, its influence upon supply and demand, its effect upon prices, and its sample industries.
Section 3: Government Policies Toward Competition
Chapter 9 also discusses the laws and agencies that the federal government has established to prevent monopolies. Some regulations have actually led to a decreased amount of competition in the economy, prompting deregulation.