Notes of Economics

A market is a situation where potential buyers are in contact with potential sellers.
A market is any place, physical or virtual, where the buyer and seller (of goods and services) meet.
Market can be local, where buyers and sellers are from the surrounding area.
Markets can be national, where the participants are from within the market country.
Markets can be international, where the market participants come from any country in the world.
Resource market
Households sell
Business buy
Product market
Households buy
Business sell
Businesses
Buy resources
Sell products
Households
Sell resources
Buy products
Costs
Money income
Goods and services
Labor, land
Resources
Goods and services
Revenue
Consumption expenditures
Resource market
Households sell
Business buy
Product market
Households buy
Business sell
Businesses
Buy resources
Sell products
Households
Sell resources
Buy products
Costs
Money income
Goods and services
Labor, land
Resources
Goods and services
Revenue
Consumption expenditures

Market structures: * Perfect competition * Monopolistic competition * Oligopoly * Monopoly
Remember that these are models, simplified representation of reality. (EX: Perfect competition has always been considered highly theoretical.)
Structure characteristics: * Number of firms * Type of products (homogeneous (identical), heterogeneous (differentiated) * Barriers of entry (freedom of entry and exit) * Price-setting power (Firms level of market power) * Non-price competition

Obstacles that limit the ability of new firms to enter a particular industry
Examples:
* Legal barriers * Patents and copyright * Import restrictions * Control over an essential resource * Financial barriers * Access to marketing and distribution channels * Significant Economies of Scale * Influences over market demand * Brand loyalty * Early market entry (high information