ECON 2010 Lecture Notes - Lecture 31: Cable Television, Imperfect Competition, Perfect Competition
5 Nov 2018
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ECON 2010 Lecture Notes - Lecture 29: Taipei Metro, European Cooperation In Science And Technology, Pyrazinamide
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ECON 2010 Lecture Notes - Lecture 31: Cable Television, Imperfect Competition, Perfect Competition
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ECON 2010 Lecture Notes - Lecture 32: Monopolistic Competition, Product Differentiation, Perfect Competition
Document Summary
Introduction: two extremes, perfect competition: many firms, identical products, ex: wheat, milk, monopoly: one firm, tap water, cable tv. Imperfect competition in between the extremes: oligopoly: only a few sellers offer similar or identical products, ex: tennis balls, cigarettes, monopolistic competition: many firms sell similar but not identical products, ex: novels, movies. Monopolistic competition: characteristics, many sellers, product differentiation, not price takers; downward sloping d curve, free entry and exit, zero economic profit in the long run, examples of monopolistic competition, apartments, books, bottled water, clothing, fast food, night clubs. In contrast, the monopolistic competitor sells a product with many close substitutes. As a result, demand for the monopolist"s product is less elastic than demand for the monopolistic competitor"s product. Short run equilibrium: profit maximization in the short-run for the monopolistically competitive firm, produce the quantity where mr = mc (where everyone makes the optimum decision, price: on the demand curve.
