ECON 1101 WEEK 9 - Monopoly and other forms of Imperfect...

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Monopoly and other forms of Imperfect Competition Frank, Jennings, and Bernanke: Ch 10 1
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2 Imperfect competition and price-setters Barriers to entry Profit maximisation for price-setters The invisible hand and monopoly Price discrimination Public policy towards competition
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3 Imperfectly competitive market: A market in which firms have at least some ability to set their own price
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Perfect competition Imperfect competition Monopolistic competition Oligopoly Monopoly 4
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Monopolistic competition is a market with the following characteristics: A large number of firms. Each firm produces a differentiated product. Firms compete on product quality, price, marketing and branding. Firms are free to enter and exit. 5
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Competing on Quality, Price, Marketing and Branding Product differentiation enables firms to compete in four areas: Quality Price r Each firm has a downward-sloping demand curve for its own product. Marketing through advertising and packaging Branding through name, sign or symbol 6
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7
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8 Quantity (French Connection jackets per day) Price & cost (dollars per French Connection jacket) D MR
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