Lecture 22: Monopolistic Competition and Intro to Oligopoly

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Lecture 22: Monopolistic Competition and Intro to Oligopoly

This lecture Clark addressed in more detail monopolistic competition, and also introduced the market structure of oligopoly.


Lecture number:
22
Pages:
2
Type:
Lecture Note
School:
University of Oklahoma
Course:
Econ 1123 - Princ. of Econ-Micro
Edition:
1

Unformatted text preview:

ECON 1123 1st Edition Lecture 22 Outline From Previous Lecture (Lecture 21) I. Characteristics of Monopolistic Competition II. Brands III. Persuasive Advertising IV. Comparison between monopolistic competitive firms and perfectly competitive firms Outline Lecture 22 I. Monopolistic Competition A) Short Run Economic Profits B) Long Run Zero Economic Profits C) Monopolistic Versus Pure Competition II. Oligopoly A) Definition B) Cartel C) Price Leadership/Dominant Firm/Competitive Fringe Lecture 22 Notes I. Monopolistic Competition A) Short Run Economic Profits For monopolistic competition you still compare the price to the average total cost to find profitablitiy. The major difference is the more elastic demand schedule. B) Long Run Zero Economic Profits ATC will be tangent to the demand schedule. In the long run, Pmc=ATC will give zero economic profits D) Monopolistic Versus Pure Competition Pure competition, price=marginal cost, economic efficiency Monopolistic competition, price>marginal cost, economic inefficiency Pure competition in the long run, production is at minimum average total costs These notes represent a detailed interpretation of the professor’s lecture. GradeBuddy is best used as a supplement to your own notes, not as a substitute.



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