Principles of Microeconomics / Unit 8 MIC 0710 short lesson, about 20 seconds
What Defines the Market
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The idea
A firm is a monopoly in a market where its product has no close substitutes. How close is close decides the market, so most monopoly arguments are arguments about substitutes.
In practice
One maker of cellophane may face many makers of flexible packaging.
Where people slip
Define the market narrowly and every brand is a monopoly; broadly and none is. Unit four's cross-price elasticity is the test.
Your place on the trail
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Unlocks
- Nothing yet depends on this.
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