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Unformatted text preview: ECON1110 TA Section 13 Professor Jennifer Wissink TA Jingxian Zheng April 23, 2009 1 Concepts Review 1. Monopolistic Competition Structure- Several firms in the market.- Firms produce differentiated products.- "Free" entry and exit.- Full and symmetric information. Short run conduct (See graph 1): acts like a mini-monopolist Long run conduct (See graph 2): Free entry will force firms long run economic profits to zero : the firms demand curve will be tangent to its long run average total cost curve. Not Pareto efficient ( q MC isnt net social surplus maximized, i.e. $MB=$MC at q MC ) Not productively efficient ( q MC q MES ) 2. Oligopoly Structure Very few sellers of the good Products may be differentiated or homogeneous Entry is limit Full and symmetric information Introduction to Game Theory Setup List of players all the players are specified in advance List of actions all the actions each player can take are spelled out Rules of play who moves and when is spelled out Information structure who knows what and when is spelled out Strategies the set of actions players can use...
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