ABSTRACT
Two polar product markets have been examined thus far: the competitive and the monopoly markets. A major difference between them is that firms in the former market confront horizontal demand functions while firms in the latter experience demand functions which are negatively sloped. In the former the market dictates the price to firms; in the latter sellers have price-setting power. In both markets buyers have the power to purchase what they will at the existing price. These are the two kinds of markets found in Alfred Marshall's Principles over a century ago. The problem with competitive and monopoly markets is that they cover a very
Monopolistic firms are any and all which face downward-sloping demand for their products. This includes all firms which are monopolies, oligopolies, and imperfect competitors. Firms which face negativesloping demand functions have some price-setting power.
