Unformatted text preview: <------> Monopoly Under perfect competition, each producer is too small to significantly affect any other producer, so a producer doesn’t need to form a strategy about how to respond to changes in the behavior of any other particular producer. Under monopoly, there is only one producer. The monopoly doesn’t need to form a strategy about how to respond to changes in the behavior of other producers, because there aren’t any other producers. In situations between perfect competition and monopoly, there are several large producers. The actions of any one producer have significant impacts on the other producers. In this situation, each producer needs to develop a strategy describing how best to respond to changes in the behavior of each of the other producers. This is where game theory comes into play. Game theory provides methods to help develop good strategies in situations where strategies are needed....
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- Fall '08
- Dumas
- Economics, Microeconomics, Game Theory, Perfect Competition, producer, Monopoly Perfect Competition
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