# Market Structure & Imperfect Competition

Size: px
Start display at page:

Transcription

1 In the Name of God Sharif University of Technology Graduate School of Management and Economics Microeconomics (for MBA students) ( st term) - Group 2 Dr. S. Farshad Fatemi Market Structure & Imperfect Competition

2 Most markets fall between the two extremes of monopoly and perfect competition An imperfectly competitive firm would like to sell more at the going price faces a downward-sloping demand curve recognizes its output price depends on the quantity of goods produced and sold Microeconomics (for MBA students) Dr. F. Fatemi Page 119

3 An oligopoly an industry with a few producers each recognizing that its own price depends both on its own actions and those of its rivals. In an industry with monopolistic competition there are many sellers producing products that are close substitutes for one another each firm has only limited ability to influence its output price. Microeconomics (for MBA students) Dr. F. Fatemi Page 120

4 The Minimum Efficient Scale and Market Demand The minimum efficient scale (MES) is the output at which a firm s longrun average cost curve stops falling. The size of the MES relative to market demand has a strong influence on market structure. Microeconomics (for MBA students) Dr. F. Fatemi Page 121

5 The degree to which monopolistically competitive prices can differ from the competitive ideal depends on: the number of other competitors the ease with which competing firms can expand their businesses to accommodate new customers (the cost of expansion) the ease with which new firms can enter the market (the cost of entry) the ability of firms to differentiate their products, by location or by either real or imagined characteristics (the cost differentiation) public awareness of price differences (the cost of gaining information on price differences) Given even limited competition, the firm should face a relatively elastic demand curve; certainly more elastic than the monopolist s. Microeconomics (for MBA students) Dr. F. Fatemi Page 122

6 Indexes to Measure Market Concentration Suppose there are F firms in a given market and the market share of each firm is defined as (it is clear that i=1 s i = 1): F s i = q i i q i (i {1, 2,, F}) N-Firm Concentration Ratio: The market share of the largest N firms in the industry N F. N ordering the firms so that: CR = s i i=1 s 1 s N s F Microeconomics (for MBA students) Dr. F. Fatemi Page 123

7 The Herfindahl index: The sum of the squares of the market shares of all the firms in the market: F HHI = s i 2 i=1 It also can be normalized (range from 0 to 1): HHI = HHI 1 F 1 1 F The Entropy index: The sum of the market shares multiplied by their logarithms: F EI = s i ln s i i=1 Microeconomics (for MBA students) Dr. F. Fatemi Page 124

8 Monopolistic Competition So far we studied two extreme cases of perfect competition and monopoly. Because the product sold by the monopolistically competitive firm is slightly different from the products sold by competing producers, the firm faces a highly elastic, but not perfectly elastic, demand curve. Microeconomics (for MBA students) Dr. F. Fatemi Page 125

9 many firms no barriers to entry product differentiation so the firm faces a downward-sloping demand curve The absence of entry barriers means that profits are competed away... Microeconomics (for MBA students) Dr. F. Fatemi Page 126

10 Monopolistic competition in the short run As do all profit maximizing firms, the monopolistic competitor will equate marginal revenue with marginal cost. It will produce Q mc units and charge price P mc, only slightly higher than the price under perfect competition. The monopolistic competitor makes a short-run economic profit equal to the area ATC 1 P mc ab. The inefficiency of its slightly restricted production level is represented by the shaded area. Microeconomics (for MBA students) Dr. F. Fatemi Page 127

11 Monopolistic competition in the long run In the LR, firms will enter the market, shifting the monopolistic competitor s demand curve down from D 1 to D 2 and making it more elastic. In equilibrium firm s demand becomes tangent to the downward sloping portion of the firm s long-run ATC. (The firm is making zero economic profit) Unlike the perfect competitor, this firm is not producing at the minimum of the long-run average total cost curve Q m. In that sense, it is underproducing. This underproduction is also reflected in the fact that the price is greater than the marginal revenue. Microeconomics (for MBA students) Dr. F. Fatemi Page 128

12 Oligopoly A market with a few sellers. The essence of an oligopolistic industry is the need for each firm to consider how its own actions affect the decisions of its relatively few competitors. Oligopoly may be characterized by collusion or by non-co-operation: Collusion: an explicit or implicit agreement between existing firms to avoid or limit competition with one another Cartel: is a situation in which formal agreements between firms are legally permitted. e.g. OPEC Microeconomics (for MBA students) Dr. F. Fatemi Page 129

13 Collusion is difficult (reaching agreements to avoid competition) if There are many firms in the industry The product is not standardized Demand and cost conditions are changing rapidly There are no barriers to entry Firms have surplus capacity Microeconomics (for MBA students) Dr. F. Fatemi Page 130

14 The kinked demand curve Consider how a firm may perceive its demand curve under oligopoly. It can observe the current price and output, but must try to anticipate rival reactions to any price change. The firm may expect rivals to respond if it reduces its price, as this will be seen as an aggressive move; so demand in response to a price reduction is likely to be relatively inelastic. but for a price increase rivals are less likely to react, so demand may be relatively elastic above P 0 ; then the firm perceives that it faces a kinked demand curve. Microeconomics (for MBA students) Dr. F. Fatemi Page 131

15 Demand MR1 MR2 MC Given this perception, the firm sees that profit will fall whether price is increased or decreased, so the best strategy is to keep price at P 0 = 40. Price will tend to be stable, even in the face of an increase in marginal cost. Microeconomics (for MBA students) Dr. F. Fatemi Page 132

16 A firm s profit operating in an imperfect competition depend on its own action as well as its rivals actions. That is why we need a different tool to study these situations. That is why we dedicate the next couple of lectures to Game Theory which gives us proper tool for studying economic agents strategic behaviour. Microeconomics (for MBA students) Dr. F. Fatemi Page 133

### Monopolistic Competition

Monopolistic Competition CHAPTER16 C H A P T E R C H E C K L I S T When you have completed your study of this chapter, you will be able to 1 Describe and identify monopolistic competition. 2 Explain how

### Textbook Media Press. CH 12 Taylor: Principles of Economics 3e 1

CH 12 Taylor: Principles of Economics 3e 1 Monopolistic Competition and Differentiated Products Monopolistic competition refers to a market where many firms sell differentiated products. Differentiated

### MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question.

Micro - HW 4 MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) In central Florida during the spring, strawberry growers are price takers. The reason

### Unit 13 AP Economics - Practice

DO NOT WRITE ON THIS TEST! Unit 13 AP Economics - Practice Multiple Choice Identify the choice that best completes the statement or answers the question. 1. A natural monopoly exists whenever a single

### CHAPTER NINE MONOPOLY

CHAPTER NINE MONOPOLY This chapter examines how a market controlled by a single producer behaves. What price will a monopolist charge for his output? How much will he produce? The basic characteristics

### Microeconomics Unit 2 The Nature and Function of Product Markets

Microeconomics Unit 2 The Nature and Function of Product Markets Characteristics: Large number of sellers Small market share No collusion which means? Producer s act independently Differentiated products

### INTERMEDIATE MICROECONOMICS LECTURE 13 - MONOPOLISTIC COMPETITION AND OLIGOPOLY. Monopolistic Competition

13-1 INTERMEDIATE MICROECONOMICS LECTURE 13 - MONOPOLISTIC COMPETITION AND OLIGOPOLY Monopolistic Competition Pure monopoly and perfect competition are rare in the real world. Most real-world industries

### AP Microeconomics Review Session #3 Key Terms & Concepts

The Firm, Profit, and the Costs of Production 1. Explicit vs. implicit costs 2. Short-run vs. long-run decisions 3. Fixed inputs vs. variable inputs 4. Short-run production measures: be able to calculate/graph

### FINALTERM EXAMINATION FALL 2006

FINALTERM EXAMINATION FALL 2006 QUESTION NO: 1 (MARKS: 1) - PLEASE CHOOSE ONE Compared to the equilibrium price and quantity sold in a competitive market, a monopolist Will charge a price and sell a quantity.

### Unit 6 Perfect Competition and Monopoly - Practice Problems

Unit 6 Perfect Competition and Monopoly - Practice Problems Multiple Choice Identify the choice that best completes the statement or answers the question. 1. One characteristic of a perfectly competitive

CH 15-16 short answer study questions Answer Section ESSAY 1. ANS: There are a large number firms; each produces a slightly different product; firms compete on price, quality and marketing; and firms are

### REDEEMER S UNIVERSITY

REDEEMER S UNIVERSITY Km 46/48 Lagos Ibadan Expressway, Redemption City, Ogun State COLLEGE OF MANAGEMENT SCIENCE DEPARTMENT OF ECONOMICS AND BUSINESS STUDIES COURSE CODE /TITLE ECO 202/Microeconomics

### MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question.

PRACTICE FOR PERFECT COMPETITION Fatma Nur Karaman MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) What is the difference between perfect competition

### Use the following to answer question 4:

Homework Chapter 11: Name: Due Date: Wednesday, December 4 at the beginning of class. Please mark your answers on a Scantron. It is late if your Scantron is not complete when I ask for it at 9:35. Get

### Many sellers: There are many firms competing for the same group of customers.

Microeconomics 2 Chapter 16 Monopolistic Competition 16-1 Between monopoly and perfect Competition One type of imperfectly competitive market is an oligopoly, a market with only a few sellers, each offering

### Chapter 8 Competitors and Competition

Chapter 8 Competitors and Competition Prof. Jepsen ECO 610 Lecture 4 December 6, 2012 John Wiley and Sons Competition If one firm s strategic choice adversely affects the performance of another, they are

### Eastern Mediterranean University Faculty of Business and Economics Department of Economics Fall Semester

Eastern Mediterranean University Faculty of Business and Economics Department of Economics 2014 15 Fall Semester ECON101 Introduction to Economics I Final Exam Type A 26 January 2015 Duration: 100 minutes

### 1. For a monopolist, present the standard diagram showing the following:

ECON 202: Principle of Microeconomics Name: Fall 2005 Bellas Second Midterm - Answers You have two hours and twenty minutes to complete this exam. Answer all questions, explain your answers, label axes

### Principles of Microeconomics Module 5.1. Understanding Profit

Principles of Microeconomics Module 5.1 Understanding Profit 180 Production Choices of Firms All firms have one goal in mind: MAX PROFITS PROFITS = TOTAL REVENUE TOTAL COST Two ways to reach this goal:

### The above Figure 1 shows the demand and cost curves facing a monopolist.

Practice 13&14 1) The key characteristics of a monopolistically competitive market structure include A) few sellers. B) sellers selling similar but differentiated products. C) high barriers to entry. D)

### Market Structure. Oligopoly

Market Structure Oligopoly Characteristics of Oligopoly The government does not intervene into the operations of the oligopolistically competitive firm in the market unless the oligopolist violates the

### Monopolistic Competition. Chapter 17

Monopolistic Competition Chapter 17 The Four Types of Market Structure Number of Firms? Many firms One firm Few firms Differentiated products Type of Products? Identical products Monopoly Oligopoly Monopolistic

### Unit 4: Imperfect Competition

Unit 4: Imperfect Competition 1 Monopoly 2 Characteristics of Monopolies 3 5 Characteristics of a Monopoly 1. Single Seller One Firm controls the vast majority of a market The Firm IS the Industry 2. Unique

### Econ 2113: Principles of Microeconomics. Spring 2009 ECU

Econ 2113: Principles of Microeconomics Spring 2009 ECU Chapter 12 Monopoly Market Power Market power is the ability to influence the market, and in particular the market price, by influencing the total

### Part III: Market Structure 12. Monopoly 13. Game Theory and Strategic Play 14. Oligopoly and Monopolistic Competition

and Part III: Structure 12. Monopoly 13. Game Theory and Strategic Play 14. and 1 / 38 and Chapter 14 and 2015.12.25. 2 / 38 and 1 2 3 4 5 3 / 38 and Q:How many firms are necessary to make a market competitive?

### Chapter 6. Competition

Chapter 6 Competition Copyright 2014 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. 1-1 Chapter 6 The goal of this

### ECON 2100 (Summer 2016 Sections 10 & 11) Exam #3C

ECON 21 (Summer 216 Sections 1 & 11) Exam #3C Multiple Choice Questions: (3 points each) 1. I am taking of the exam. C. Version C 2. is a market structure in which there is one single seller of a unique

### ECON 2100 (Summer 2016 Sections 10 & 11) Exam #3D

ECON 21 (Summer 216 Sections 1 & 11) Exam #3D Multiple Choice Questions: (3 points each) 1. I am taking of the exam. D. Version D 2. is a market structure in which there is one single seller of a unique

### Monopolistic Competition

CHAPTER 16 Monopolistic Competition Goals in this chapter you will Examine market structures that lie between monopoly and competition Analyze competition among firms that sell differentiated products

### ECON 102 Wooten Final Exam Practice Exam Solutions

www.liontutors.com ECON 102 Wooten Final Exam Practice Exam Solutions 1. A monopolist will increase price and decrease quantity to maximize profits when compared to perfect competition because a monopolist

### Three Rules and Four Models

Three Rules and Four Models Three Rules: How to find the profit maximizing quantity: A firm will maximize its profit (or minimize its losses) by producing that output at which marginal revenue and marginal

### Three Rules and Four Models

Three Rules and Four Models Three Rules: How to find the profit maximizing quantity: A firm will maximize its profit (or minimize its losses) by producing that output at which marginal revenue and marginal

### ECONOMICS. Paper 3 : Fundamentals of Microeconomic Theory Module 28 : Non collusive and Collusive model

Subject Paper No and Title Module No and Title Module Tag 3 : Fundamentals of Microeconomic Theory 28 : Non collusive and Collusive model ECO_P3_M28 TABLE OF CONTENTS 1. Learning Outcomes 2. Introduction

### CH 13. Name: Class: Date: Multiple Choice Identify the choice that best completes the statement or answers the question.

Class: Date: CH 13 Multiple Choice Identify the choice that best completes the statement or answers the question. 1. One requirement for an industry to be perfectly competitive is that a. sellers and buyers

### 1. For a monopolist, present the standard diagram showing the following:

ECON 202: Principle of Microeconomics Name: Fall 2006 Bellas Second Midterm You have two hours and thirty minutes to complete this exam. Answer all questions, explain your answers, label axes and curves

### Principles of Microeconomics Assignment 8 (Chapter 10) Answer Sheet. Class Day/Time

1 Principles of Microeconomics Assignment 8 (Chapter 10) Answer Sheet Name Class Day/Time Questions of this homework are in the next few pages. Please find the answer of the questions and fill in the blanks

### Unit 4: Imperfect Competition

Unit 4: Imperfect Competition 1 FOUR MARKET STRUCTURES Perfect Competition Monopolistic Competition Oligopoly Pure Monopoly Imperfect Competition Every product is sold in a market that can be considered

### Chapter 14 Oligopoly and Monopoly

Economics 6 th edition 1 Chapter 14 Oligopoly and Monopoly Modified by Yulin Hou For Principles of Microeconomics Florida International University Fall 2017 Oligopoly: a very different market structure

### Oligopoly: How do firms behave when there are only a few competitors? These firms produce all or most of their industry s output.

Topic 8 Chapter 13 Oligopoly and Monopolistic Competition Econ 203 Topic 8 page 1 Oligopoly: How do firms behave when there are only a few competitors? These firms produce all or most of their industry

### Microeconomics. Use the Following Graph to Answer Question 3

More Tutorial at www.dumblittledoctor.com Microeconomics 1. To an economist, a good is scarce when: *a. the amount of the good available is less than the amount that people want when the good's price equals

### full file at

Chapter 10 Monopolistic Competition and Oligopoly CHAPTER SUMMARY The characteristics of the monopolistically competitive and the oligopoly are introduced and compared with the other market structures.

### Monopoly. 3 Microeconomics LESSON 5. Introduction and Description. Time Required. Materials

LESSON 5 Monopoly Introduction and Description Lesson 5 extends the theory of the firm to the model of a Students will see that the profit-maximization rules for the monopoly are the same as they were

### Quiz #5 Week 04/12/2009 to 04/18/2009

Quiz #5 Week 04/12/2009 to 04/18/2009 You have 30 minutes to answer the following 17 multiple choice questions. Record your answers in the bubble sheet. Your grade in this quiz will count for 1% of your

### Monopoly and How It Arises

Monopoly and How It Arises A monopoly is a market: That produces a good or service for which no close substitute exists In which there is one supplier that is protected from competition by a barrier preventing

### ECON 2100 (Summer 2012 Sections 07 and 08) Exam #3A

ECON 21 (Summer 212 Sections 7 and 8) Exam #3A Multiple Choice Questions: (3 points each) 1. I am taking of the exam. A. Version A 2. Excess Capacity refers to the A. quantity of output at which Average

### Industrial Organization ( st term)

Industrial Organization 44772 (1392-93 1 st term) Oligopoly Theory Dr. S. Farshad Fatemi Graduate School of Management and Economics Sharif University of Technology September 23, 2013 1 / 19 Dr. S. Farshad

### Unit 4: Imperfect Competition

Unit 4: Imperfect Competition 1 Monopoly 2 Characteristics of Monopolies 3 5 Characteristics of a Monopoly 1. Single Seller One Firm controls the vast majority of a market The Firm IS the Industry 2. Unique

### 2013 sample MC CH 15. Name: Class: Date: Multiple Choice Identify the choice that best completes the statement or answers the question.

Class: Date: 2013 sample MC CH 15 Multiple Choice Identify the choice that best completes the statement or answers the question. 1. Monopolistic competition is identified by a. many firms producing a slightly

### 29/02/2016. Market structure II- Other types of imperfect competition. What Is Monopolistic Competition? OTHER TYPES OF IMPERFECT COMPETITION

Market structure II- Other types of imperfect competition OTHER TYPES OF IMPERFECT COMPETITION Characteristics of Monopolistic Competition Monopolistic competition is a market structure in which many firms

### Short run and long run price and output decisions of a monopoly firm,

1 Chapter 1-Theory of Monopoly Syllabus-Concept of imperfect competition, Short run and long run price and output decisions of a monopoly firm, Concept of a supply curve under monopoly, comparison of perfect

### Managerial Economics Prof. Trupti Mishra S.J.M School of Management Indian Institute of Technology, Bombay. Lecture - 33 Oligopoly (Contd )

Managerial Economics Prof. Trupti Mishra S.J.M School of Management Indian Institute of Technology, Bombay Lecture - 33 Oligopoly (Contd ) We will continue our discussion on theory of Oligopoly, typically

### Managerial Economics & Business Strategy Chapter 9. Basic Oligopoly Models

Managerial Economics & Business Strategy Chapter 9 Basic Oligopoly Models Overview I. Conditions for Oligopoly? II. Role of Strategic Interdependence III. Profit Maximization in Four Oligopoly Settings

### COMPETITION AND MARKETS BEFORE YOU BEGIN. Market Structures. Looking at the Chapter. Date Period. Chapter

COMPETITION AND MARKETS BEFORE YOU BEGIN Looking at the Fill in the blank spaces with the missing words. Market Structures Perfect Competition sellers product No barriers to entry Price taker Produce where

### Prof. Wolfram Elsner Faculty of Business Studies and Economics iino Institute of Institutional and Innovation Economics. Real-World Markets

Prof. Wolfram Elsner Faculty of Business Studies and Economics iino Institute of Institutional and Innovation Economics Real-World Markets Readings for this lecture Required reading this time: Real-World

### Microeconomics 2302 Potential questions and study guide for Exam 2. 6 of these will be on your exam.

Microeconomics 2302 Potential questions and study guide for Exam 2 6 of these will be on your exam. Potential questions are in Black Font. Study Guide stuff is in red font. 1. Elasticity question 1 a.

### Microeconomics (Oligopoly & Game, Ch 12)

Microeconomics (Oligopoly & Game, Ch 12) Lecture 17-18, (Minor 2 coverage until Lecture 18) Mar 16 & 20, 2017 CHAPTER 12 OUTLINE 12.1 Monopolistic Competition 12.2 Oligopoly 12.3 Price Competition 12.4

### Principles of Economics. January 2018

Principles of Economics January 2018 Monopoly Contents Market structures 14 Monopoly 15 Monopolistic competition 16 Oligopoly Principles of Economics January 2018 2 / 39 Monopoly Market power In a competitive

### ECON December 4, 2008 Exam 3

Name Portion of ID# Multiple Choice: Identify the letter of the choice that best completes the statement or answers the question. 1. A fundamental source of monopoly market power arises from a. perfectly

### ECON 102 Kagundu Final Exam (New Material) Practice Exam Solutions

www.liontutors.com ECON 102 Kagundu Final Exam (New Material) Practice Exam Solutions 1. A A large number of firms will be able to operate in the industry because you only need to produce a small amount

### ECONOMICS SOLUTION BOOK 2ND PUC. Unit 6. I. Choose the correct answer (each question carries 1 mark)

Unit 6 I. Choose the correct answer (each question carries 1 mark) 1. A market structure which produces heterogenous products is called: a) Monopoly b) Monopolistic competition c) Perfect competition d)

### Eco201 Review questions for chapters Prof. Bill Even ====QUESTIONS FOR CHAPTER 13=============================

Eco201 Review questions for chapters 13-15 Prof. Bill Even ====QUESTIONS FOR CHAPTER 13============================= 1) A monopoly has two key features, which are. A) barriers to entry and close substitutes

### Econ 121b: Intermediate Microeconomics

Econ 11b: Intermediate Microeconomics Dirk Bergemann, Spring 01 Week of 3/18-3/4 1 Lecture 14: Theory of Production We can use tools similar to those we used in the consumer theory section of the class

### Monopoly and How It Arises

13 MONOPOLY Monopoly and How It Arises A monopoly is a market: That produces a good or service for which no close substitute exists If a good has a close substitute, even if it is produced by only one

### Lecture 10: Market Power and Monopoly

Lecture 10: Market Power and Monopoly November 8, 2016 Overview Course Administration Sources of Market Power Market Power and Marginal Revenue Profit Maximization and Market Power How a Firm With Market

### ECON 200. Introduction to Microeconomics

ECON 200. Introduction to Microeconomics Homework 5 Part II Name: [Multiple Choice] 1. A firm is a natural monopoly if it exhibits the following as its output increases: (d) a. decreasing marginal revenue

### Figure: Computing Monopoly Profit

Name: Date: 1. Compared to perfect competition: A) monopoly produces more at a lower price. B) monopoly produces where MR > MC, and a perfectly competitively firm produces where P = MC. C) monopoly may

### Monopolistic Competition

16 Monopolistic Competition PowerPoint Slides prepared by: Andreea CHIRITESCU Eastern Illinois University 1 Monopolistic Competition Imperfect competition Between perfect competition and monopoly Oligopoly

### Contents. Concepts of Revenue I-13. About the authors I-5 Preface I-7 Syllabus I-9 Chapter-heads I-11

Contents About the authors I-5 Preface I-7 Syllabus I-9 Chapter-heads I-11 1 Concepts of Revenue 1.1 Introduction 1 1.2 Concepts of Revenue 2 1.3 Revenue curves under perfect competition 3 1.4 Revenue

### Lecture 11 Imperfect Competition

Lecture 11 Imperfect Competition Business 5017 Managerial Economics Kam Yu Fall 2013 Outline 1 Introduction 2 Monopolistic Competition 3 Oligopoly Modelling Reality The Stackelberg Leadership Model Collusion

### ECON 2100 (Summer 2012 Sections 07 and 08) Exam #3C Answer Key

ECON 21 (Summer 212 Sections 7 and 8) Exam #3C Answer Key Multiple Choice Questions: (3 points each) 1. I am taking of the exam. C. Version C 2. is a market structure in which there is one single seller

### Postgraduate Diploma in Marketing December 2017 Examination Economic and Legal Impact (Econ)

Postgraduate Diploma in Marketing December 2017 Examination Economic and Legal Impact (Econ) Date: 20 December 2017 Time: 0830 Hrs 1130 Hrs Duration: Three (03) Hrs ) Total marks for this paper is 100

### INTRODUCTION ECONOMIC PROFITS

INTRODUCTION This chapter addresses the following key questions: What are profits? What are the unique characteristics of competitive firms? How much output will a competitive firm produce? Chapter 7 THE

### PWNI I'IHITIIBIFI UNIVERSITY EXAMINER(S) INSTRUCTIONS FACULTY OF MANAGEMENT SCIENCES QUALIFICATION: BACHELOR OF ACCOUNTING

. I'IHITIIBIFI UNIVERSITY OF SCIENCE FII'ID TECHNOLOGY FACULTY OF MANAGEMENT SCIENCES DEPARTMENT OF ACCOUNTING, ECONOMICS AND FINANCE QUALIFICATION: BACHELOR OF ACCOUNTING QUALIFICATION CODE: Z3BECO LEVEL:

### Monopolistic Competition Oligopoly Duopoly Monopoly. The further right on the scale, the greater the degree of monopoly power exercised by the firm.

Oligopoly Monopolistic Competition Oligopoly Duopoly Monopoly The further right on the scale, the greater the degree of monopoly power exercised by the firm. Imperfect competition refers to those market

### Lecture 11: Market Power and Monopoly

Lecture 11: Market Power and Monopoly November 13, 2018 Overview Course Administration Sources of Market Power Market Power and Marginal Revenue Profit Maximization and Market Power How a Firm With Market

### Chapter 15 Oligopoly

Goldwasser AP Microeconomics Chapter 15 Oligopoly BEFORE YOU READ THE CHAPTER Summary This chapter explores oligopoly, a market structure characterized by a few firms producing a product that mayor may

### Textbook questions: Competitors and Competition

Competitors and Competition This chapter focuses on how market structure affects competition. It begins with a discussion of how to identify competitors, define markets, and describe the market structure.

### Lecture 11: Market Power and Monopoly

Lecture 11: Market Power and Monopoly November 14, 2017 Overview Course Administration Sources of Market Power Market Power and Marginal Revenue Profit Maximization and Market Power How a Firm With Market

### Economic Analysis for Business Decisions Multiple Choice Questions Unit-2: Demand Analysis

Economic Analysis for Business Decisions Multiple Choice Questions Unit-2: Demand Analysis 1. The law of demand states that an increase in the price of a good: a. Increases the supply of that good. b.

### Problem Set 4 Eco 112, Fall 2011 Chapters covered: Ch. 8 and Ch. 9 (up to slide 15 Price Discrimination) Due date: October 20, 2011

Problem Set 4 Eco 112, Fall 2011 Chapters covered: Ch. 8 and Ch. 9 (up to slide 15 Price Discrimination) Due date: October 20, 2011 There are 30 multiple choice questions in this problem set. Answer these

### Chapter 15: Industrial Organization

Chapter 15: Industrial Organization Imperfect Competition Product Differentiation Advertising Monopolistic Competition Oligopoly Collusion Cournot Model Stackelberg Model Bertrand Model Cartel Legal Provisions

### Lesson 3-2 Profit Maximization

Lesson 3-2 Profit Maximization Standard 3b: Students will explain the 5 dimensions of market structure and identify how perfect competition, monopoly, monopolistic competition, and oligopoly are characterized

### Syllabus item: 57 Weight: 3

1.5 Theory of the firm and its market structures - Monopoly Syllabus item: 57 Weight: 3 Main idea 1 Monopoly: - Only one firm producing the product (Firm = industry) - Barriers to entry or exit exists,

### Section I (20 questions; 1 mark each)

Foundation Course in Managerial Economics- Solution Set- 1 Final Examination Marks- 100 Section I (20 questions; 1 mark each) 1. Which of the following statements is not true? a. Societies face an important

### B.V. Patel Institute of Business Management, Computer & Information Technology, Uka Tarsadia University : Managerial Economics

Unit-1 Introduction of Managerial Economics and Cost Analysis Answer the following. (1 mark) 1. Define Managerial Economics? 2. How does Managerial Economics help managers to become efficient and competent?

### Eastern Mediterranean University Faculty of Business and Economics Department of Economics Fall Semester

Eastern Mediterranean University Faculty of Business and Economics Department of Economics 2016-17 Fall Semester Duration: 110 minutes ECON101 - Introduction to Economics I Final Exam Type A 11 January

### a. Sells a product differentiated from that of its competitors d. produces at the minimum of average total cost in the long run

I. From Seminar Slides: 3, 4, 5, 6. 3. For each of the following characteristics, say whether it describes a perfectly competitive firm (PC), a monopolistically competitive firm (MC), both, or neither.

### 23 Perfect Competition

23 Perfect Competition Learning Objectives After you have studied this chapter, you should be able to 1. define price taker, total revenues, marginal revenue, short-run shutdown price, short-run breakeven

### AQA Economics A-level

AQA Economics A-level Microeconomics Topic 5: Perfect Competition, Imperfectly Competitive Markets and Monopoly 5.5 Oligopoly Notes Characteristics of an oligopoly: High barriers to entry and exit There

### Introduction to Business (Managerial) Economics

Contents Unit 1 Introduction to Business (Managerial) Economics Meaning of Managerial Economics... 2 Definitions of Managerial Economics... 2 Features (Characteristics) of Managerial Economics... 5 Nature

### CONTENTS. Introduction to the Series. 1 Introduction to Economics 5 2 Competitive Markets, Demand and Supply Elasticities 37

CONTENTS Introduction to the Series iv 1 Introduction to Economics 5 2 Competitive Markets, Demand and Supply 17 3 Elasticities 37 4 Government Intervention in Markets 44 5 Market Failure 53 6 Costs of

### Perfect Competition CHAPTER14

Perfect Competition CHAPTER14 MARKET TYPES The four market types are Perfect competition Monopoly Monopolistic competition Oligopoly MARKET TYPES Perfect Competition Perfect competition exists when Many

### 24TECO 202 COURSE OUTLINE. Prerequisites: None. Course Description:

Lecture 24TECO 202 24TPrinciples of Microeconomics COURSE OUTLINE Revised: Fall 2015 Prerequisites: None Course Description: Introduces the basic concepts of microeconomics. Explores the free market concepts

### LAW. COMPETITION LAW Introduction to Economics of Competition Law Part-II

LAW COMPETITION LAW Introduction to Economics of Competition Law Part-II Q1 E-TEXT Module 2: Introduction to Economics of Competition Law Part II Subject Name: Law Paper Name: Competition Law Module ID:

### Chapter 13 Monopolistic Competition: The Competitive Model in a More Realistic Setting

Economics 6 th edition 1 Chapter 13 Monopolistic Competition: The Competitive Model in a More Realistic Setting Modified by Yulin Hou For Principles of Microeconomics Florida International University Fall

### MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question.

Review 10-14-15 MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1. The four-firm concentration ratio equals the percentage of the value of accounted

### 1. Why is utility subjective? 2. What are inferior options? 3. Suppose the price of A is 1, the price of B is 2 and the price of C is 1.

Study Questions for Chapters 7-11 Chapter 7 1. Why is utility subjective? 2. What are inferior options? 3. Suppose the price of A is 1, the price of B is 2 and the price of C is 1.50 a. Complete the following

### 2007 Thomson South-Western

Monopolistic Competition Characteristics: Many sellers Product differentiation Free entry and exit In the long run, profits are driven to zero Firms have some control over price What does the costs graph