tailieunhanh - Lecture Business economics - Lecture 12: Oligopoly

In this chapter we discuss the types of imperfect competition and examine a particular type called oligopoly. Our goal in this chapter is to see how this interdependence shapes the firms’ behavior and what problems it raises for public policy. | A monopolistically competitive market is characterized by three attributes: many firms, differentiated products, and free entry. The equilibrium in a monopolistically competitive market differs from perfect competition in that each firm has excess capacity and each firm charges a price above marginal cost. Monopolistic competition does not have all of the desirable properties of perfect competition. There is a standard deadweight loss of monopoly caused by the markup of price over marginal cost. Review of the previous lecture The number of firms can be too large or too small. The product differentiation inherent in monopolistic competition leads to the use of advertising and brand names. Critics argue that firms use advertising and brand names to take advantage of consumer irrationality and to reduce competition. Defenders argue that firms use advertising and brand names to inform consumers and to compete more vigorously on price and product quality. Review of the previous lecture . | A monopolistically competitive market is characterized by three attributes: many firms, differentiated products, and free entry. The equilibrium in a monopolistically competitive market differs from perfect competition in that each firm has excess capacity and each firm charges a price above marginal cost. Monopolistic competition does not have all of the desirable properties of perfect competition. There is a standard deadweight loss of monopoly caused by the markup of price over marginal cost. Review of the previous lecture The number of firms can be too large or too small. The product differentiation inherent in monopolistic competition leads to the use of advertising and brand names. Critics argue that firms use advertising and brand names to take advantage of consumer irrationality and to reduce competition. Defenders argue that firms use advertising and brand names to inform consumers and to compete more vigorously on price and product quality. Review of the previous lecture Lecture 12 Oligopoly Instructor: Abbas Course code: ECO 400 Lecture Outline Understanding oligopoly Competition , monopolies and cartels Equilibrium of an oligopoly Oligopoly size Prisoners dilemma Public policy towards oligopoly Between Monopoly And Perfect Competition Imperfect competition refers to those market structures that fall between perfect competition and pure monopoly. Imperfect competition includes industries in which firms have competitors but do not face so much competition that they are price takers. Types of Imperfectly Competitive Markets Oligopoly Only a few sellers, each offering a similar or identical product to the others. Monopolistic Competition Many firms selling products that are similar but not identical. Markets With Only A Few Sellers Because of the few sellers, the key feature of oligopoly is the tension between cooperation and self-interest. Markets With Only A Few Sellers Characteristics of an Oligopoly Market Few sellers offering similar or

• Kinh tế học
• Business economics
• Lecture Business economics
• Business applications of economics
• Open economy
• Competitive markets
• Imperfect competition
• Economic Models
• Principles of economics
• Economics of agriculture
• Monopolistic competition
• Macroeconomic policy
• Supply curve
• Elasticity of demand
• Consumer choice
• Competitive firms
• Gross domestic product
• Financial intermediaries
• Productivity growth
• Natural rate of unemployment
• Labor force
• Money supply