Economics 1021A/B Lecture Notes - Game Theory, Perfect Competition, Brand Loyalty

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ECON 1021A/B Full Course Notes
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ECON 1021A/B Full Course Notes
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Topic 11 monopolistic competition and oligopoly: introduction for monopolistic competition, possible sr equilibrium for monopolistic competition, lr equilibrium for monopolistic competition and excess capacity theorem, some notes for oligopoly, introduction for monopolistic competition. Many sellers (although not as many as under perfect competition) If you raise the price, there is less demand. But, there are always people willing to buy the higher price (in perfect competition, demand was horizontal raise price = sell nothing. Competition the product is heterogeneous (if you don"t like this company"s, you can leave) Easy entry not part of monopoly (you can"t just walk up and start a new stamp place) Competitive market structure usually means perfect competition: possible sr equilibrium for monopolistic competition. There are three possibly short run equilibria for a firm operating under monopolistic competition, one where the firm makes positive economic profits, one where the firm makes zero economic profits, one where the firm makes negative economic profits.

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