Menu_09_Nov_10 - TODAYS MENU Tuesday 09 November 2010 I...

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TODAY’S MENU: Tuesday 09 November 2010 I. BUSINESS A. Practice Problems 1. Chapter 16: 1-8, 10, 14, 15 2. Chapter 16 Appendix: Both B. Third exam: Next time II. SUBSTANCE A. Monopolistic competition 1. Efficiency and excess capacity 2. Examples B. Oligopoly 1. Market structure a. Few sellers, many buyers i. Concentration ratio ii. Implications b. Homogeneous or differentiated goods i. Implications c. Significant barriers to entry/exit i. Implications 2. Firm behavior: Compete or cooperate? a. Cartel i. Definition ii. Behavior b. Price leadership i. Definition ii. Behavior c. Price competition i. Contestable markets 3. Duopoly example: Game theory 4. General conclusions III: NEXT TIME A. Third exam over Chapters 12, 14, 15, 16 Monopolistic competitive market o Long run economic profit will be zero o A lot of ways to differentiate your product o Monopolist sets price BUT prices can be different due to the differentiate
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Location is example o Firms will have different demand structures Perfectly competitive market o Consumers are perfectly elastic in their demand o Only one price for all goods Suppose that t-shirts are sold in a monopolistically competitive market. Suppose further that the market price is currently $10 per shirt and the average total cost is $9 per shirt. Over time, everything else
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This note was uploaded on 01/16/2012 for the course ECON 2010 taught by Professor Roussel during the Spring '08 term at LSU.

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Menu_09_Nov_10 - TODAYS MENU Tuesday 09 November 2010 I...

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