Industrial economics is a field of economics that studies the strategic behavior of firms, the structure of markets and their interactions. The study of industrial organization adds to the perfectly competitive model real-world frictions such as limited information, transaction cost, cost of adjusting prices, government actions, and barriers to entry by new firms into a market. It then considers how firms are organized and how they compete. Perhaps a most appropriate term is the "Economics of Imperfect Competition". The development of industrial organization as a separate field owed much to Edward Chamberlin, Edward S. Mason and Joe S. Bain.
Industrial Ecunomics
Wednesday, June 23, 2010
Posted by AnjanThere are two major approaches to the study of industrial organization: the first approach is primarily descriptive and provides an overview of industrial organization. The second, price theory, uses microeconomic models to explain firm behavior and market structure.
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