ch11 - Chapter 11 Imperfect competition Monopolistic...

Info iconThis preview shows pages 1–4. Sign up to view the full content.

View Full Document Right Arrow Icon
Chapter 11– Imperfect competition Monopolistic competition o Exercise 11.1: Monopolistic competition diagram Oligopoly Game theory Original prisoner’s dilemma Oligopoly game Sequential games HDTV research game Monopolistic competition Assumptions Each firm produces a differentiated product No entry barriers No strategic interdependence firms ignore rival choices Results SR π > 0 or π < 0 (if P > AVC) and P > MC. LR : π firm demand tangent to LRAC tangency occurs at downward sloping portion of LRAC P = LRAC, P > MC LRAC > MC LRAC not minimised which… is called the excess capacity result does NOT imply excess entry EC120 Chapter 11 – Imperfect competition page 1 of 9
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
because entry increases variety. EC120 Chapter 11 – Imperfect competition page 2 of 9
Background image of page 2
Exercise 11.1: Monopolistic competition diagram stment to long-run equilibrium ___________ profits induce _______ ___________ shifts demand curve ____ ___________ continues until … demand is _______________ and profits = _______ _________ profits induce ________ _________ shifts demand curve ____ _________ continues until … demand is _________________ and profits = _______
Background image of page 3

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 4
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 01/17/2012 for the course ECONOMICS 120 taught by Professor Mesta during the Fall '10 term at Wilfred Laurier University .

Page1 / 9

ch11 - Chapter 11 Imperfect competition Monopolistic...

This preview shows document pages 1 - 4. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online