Textbook Notes (368,566)
United States (206,084)
Economics (294)
ECON 200 (117)
Dr.Neri (15)
Chapter 16

Microeconomics chapter 16.docx

2 Pages
130 Views
Unlock Document

Department
Economics
Course
ECON 200
Professor
Dr.Neri
Semester
Fall

Description
Microeconomics Chapter 16  Oligopoly: a market structure in which only a few sellers offer similar or identical products.  Type of imperfect competition  Less competition  Measure by concentration ratio: % of total output in the market supplied by the 4 largest firms  High concentration: cereal, aircraft, laundry equipment, and cigarettes.  Monopolistic competition: many firms sell products that are similar but not identical  Each firm has a monopoly on the product it makes but many other firms make similar products that compete for the same customers.  Many sellers  Product differentiation: products are slightly different.  Free entry and exit  Different from perf competition because the products are slightly different.  Monopolistic competition  Short run  Like monopoly; has downward shaped demand curve and maximizes profit when MR = MC, then use demand curve to show the price to sell at.  If demand curve is belowATC = loss and vice versa.  Long run equilibrium  When a firm is making a profit, new firms have incentive to join market, which increases the number of products for consumers to choose from and decreases demand, shifting the demand curve to the left, and decreasing profit. • Continues until firms are making zero economic profit ♦ When the demand curve and theATC are tangent.  Price > MC • MR = MC, and demand curve makes MR < Price  Price =ATC • Free entry and exit drive economic profit to zero.  Monopolistic Competition vs Perfect Competition  Excess capacity: monopolistic competitions produce on the downward sloping
More Less

Related notes for ECON 200

Log In


OR

Join OneClass

Access over 10 million pages of study
documents for 1.3 million courses.

Sign up

Join to view


OR

By registering, I agree to the Terms and Privacy Policies
Already have an account?
Just a few more details

So we can recommend you notes for your school.

Reset Password

Please enter below the email address you registered with and we will send you a link to reset your password.

Add your courses

Get notes from the top students in your class.


Submit