“c01AnIntroductionToMicroeconomics_PrintPDF” — 2022/7/19 — 7:26 — page 24 — #22
Figure 1.10 (parts 1 and 2) illustrates the changeable level of prices (measured using price indexes against a base period) over recent years in Australia’s property and share markets. When market prices like these change, they generate signals and create positive and negative incentives that help owners of resources make important economic decisions and answer the three basic economic questions (i.e. what and how much to produce, how to produce and for whom to produce). FIGURE 1.10 How the market prices of Australian property and shares have changed in recent years.
FS
Part 1 — Change in Australian residential property prices in capital cities (measured quarterly using a price index with a base value in 2011–12 of 100 points).
O
225
175
PR O
Index Number
200
150 125 100
Melbourne Adelaide Hobart Canberra
PA
Sydney Brisbane Perth Darwin Weighted average of eight capital cities
G
De c M -11 ar Ju -12 n Se -12 pDe 12 c M -12 ar Ju -13 n Se -13 p De -13 c M -13 ar Ju -14 n Se -14 pDe 14 c M -14 ar Ju -15 n Se -15 pDe 15 c M -15 ar Ju -16 n Se -16 pDe 16 c M -16 ar Ju -17 n Se -17 p De -17 c M -17 ar Ju -18 n Se -18 pDe 18 c M -18 ar Ju -19 n Se -19 pDe 19 c M -19 ar Ju -20 n Se -20 p De -20 c M -20 ar Ju -21 n Se -21 pDe 21 c21
E
75
D
2011–12 = 100.0
Source: Australian Bureau of Statistics, Residential Property Price indexs: Eight Capital Cities December 2021
TE
ASX 200 Chart
Part 2 — An index that measures changes in the share prices for Australia’s top 200 companies.
CO RR EC
8000 7000 6000 5000 4000
2004
2006
2008
2010
2012
2014
2016
2018
2020
2022
U
N
3000
Source: Market Index, see https://www.marketindex.com.au/asx200
1.5.2 Types of market structure As institutions for making economic decisions, markets generally operate best or most efficiently when they are free or perfectly competitive. Perfect or pure competition involves strong rivalry between many firms in a particular market where each seller tries to undercut the price and exceed the product quality of the rival firm. However, this ideal situation does not always exist in our economy. Indeed, there are a variety of market structures. Here, the concept of market structure refers to the type of 24
Key Concepts VCE Economics 2 Units 3 & 4 Eleventh Edition
Market structure refers to the type and level of competition that exists in various markets, such as perfect monopoly or perfect competition.
