MARKETS AND TYPES OF GOODS

Markets and Types of Goods

Markets and Types of Goods

It is a truth universally acknowledged that product markets are often far from competitive. Economists have taken two main routes to addressing this fact. At the micro level, the field of industrial organisation has developed a sophisticated array of models which focus on strategic interactions between firms in a single market. At the aggregate level, many fields, including international trade, macroeconomics and growth, have used models of monopolistic competition to incorporate increasing returns to scale and product differentiation into general equilibrium. Once aggregate supply and demand curves for labor ...