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Questions and Answers
“ meralco and Maynilad”– (One Seller and Many Buyers) - exist when a unique product or services is available from a single vendor and that the vendor can prevent the entry of all others into the market.
“ meralco and Maynilad”– (One Seller and Many Buyers) - exist when a unique product or services is available from a single vendor and that the vendor can prevent the entry of all others into the market.
o Monopoly
“gas stations and teleservices”– (Few Sellers and Many Buyers / Sellers either compete or collaborate with each other.) exist when there are so few suppliers of a product or service that action by one will almost inevitably result in similar action by the others.
“gas stations and teleservices”– (Few Sellers and Many Buyers / Sellers either compete or collaborate with each other.) exist when there are so few suppliers of a product or service that action by one will almost inevitably result in similar action by the others.
o Oligopoly
“nescafe and soft drinks”– (Sellers are the price settlers and Many Sellers and Many Buyers) - a large number of sellers and buyers. They do not sell identical products but are slightly similar.
“nescafe and soft drinks”– (Sellers are the price settlers and Many Sellers and Many Buyers) - a large number of sellers and buyers. They do not sell identical products but are slightly similar.
o Monopolistic Competition
return of the capital or cost of using capital.
return of the capital or cost of using capital.
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calculated using the principal only, ignoring any interest that had been gotten from preceding periods.
calculated using the principal only, ignoring any interest that had been gotten from preceding periods.
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1 month-30 days
1 year- 360 days (banker’s year)
1 month-30 days 1 year- 360 days (banker’s year)
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1 year- 365 days
1 leap year= 366 days
1 year- 365 days 1 leap year= 366 days
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- interest of an interest period is calculated on the principal plus total amount of interest accumulated in the previous period. “the interest on top of interest”
- interest of an interest period is calculated on the principal plus total amount of interest accumulated in the previous period. “the interest on top of interest”
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cost of borrowing money
cost of borrowing money
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-specifies the rate of interest and a number of interest periods in one year.
-specifies the rate of interest and a number of interest periods in one year.
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Study Notes
Market Structure
- A market structure with one seller and many buyers exists when a unique product or service is available from a single vendor, and the vendor can prevent the entry of others into the market. (Example: Meralco and Maynilad)
- A market structure with few sellers and many buyers exists when there are only a few suppliers of a product or service, and action by one supplier will likely result in similar action by the others. (Example: Gas stations and teleservices)
Product Differentiation
- A market structure with many sellers and many buyers exists when there are a large number of sellers and buyers, and they do not sell identical products, but rather slightly similar products. (Example: Nescafe and soft drinks)
Time and Interest Calculations
- 1 month is equivalent to 30 days
- 1 year is equivalent to 360 days (banker's year) or 365 days (normal year), and 366 days in a leap year
- Interest on top of interest, also known as compound interest, is calculated on the principal plus the total amount of interest accumulated in the previous period
Cost of Borrowing Money
- The cost of borrowing money is specified by the rate of interest and the number of interest periods in one year
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Description
Learn about the concept of a monopoly market structure using the case of Meralco and Maynilad where a single vendor controls the supply of a unique product or service, with no other competitors in the market.
