ECON 101 Chapter Notes - Chapter 11: The Incentive, Creative Destruction, Normal-Form Game
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ECON 101 Full Course Notes
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Document Summary
Most industries in canada have either large number of small firms or a small number of large firms. Why imperfectly competitive firms have differentiated products and often engage in non- price competition. The key elements of the theory of monopolistic competition. That strategic behaviour is key feature of oligopoly. How to use game theory to explain the difference between cooperative and non-cooperative outcomes among oligopolists. Some are price takers (i. e. agriculture, raw materials); others have influence over prices and have local market power due to unique location (i. e. restaurants, clothing stores) Monopolies (i. e. utilities) mostly government regulated. Most modern industries are dominated by large firms containing several firms. Concentration ratio: the fraction of total market sales controlled by a specified number of the industry"s largest firms: highly concentrated = small number of large firms. To find concentration ratio, we need to define the market accurately (local vs international competition)
