Mostly summarized from Gregory Mankiw’s Principles of Economics, 5th Ed.

PART 5 Firm Behavior and the Organization of Industry
Chapter 13 of 36 Firms In Competitive Markets
Section 2 of 24
…
If a gas station raised its price for gasoline by 20 percent it would see a large drop in the amount of gasoline it sold.
Its customers would quickly switch to buying at other gas stations.
If a water utility company raised the price of water by 20 percent it would see only a small decrease in the amount of water it sells.
People would decrease somewhat the amount of water they use, but it’s unlikely they would be able to find another supplier.
The difference between a local gasoline market and water market is many gas stations supply gasoline, but there is only one supplier of water.
…
In this chapter behavior of competitive firms such as gas stations will be discussed.
A market is competitive if each buyer and seller
· is small compared to the size of the market
· has little influence on market prices
If a firm can influence the market price of the good it sells it has “market power” and is not considered a competitive firm.
In this chapter about competitive firms we will find a market supply curve is closely linked to the competing firms' costs of production.
Also discussed are distinctions among a firm's types of costs - fixed, variable, average, and marginal - and how they influence supply decisions.
… …
gas station
gasorin sutando
ガソリンスタンド

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