perfect competition monopolistic competition monopoly (simple) monopoly (perf. discriminating)STRUCTURE number of firms many several one one type of output homogeneous heterogeneous not applicable (but considersubstitutes in related markets)not applicable (but considersubstitutes in related markets) entry/exit free free barriers to entry barriers to entry information full and symmetric full and symmetric full and symmetric full and symmetric firm’s demand price taker - horizontal price maker - downward sloping price maker - downwardslopingprice maker - downward sloping market demand downward sloping don’t really draw one firm is same as market firm is same as marketCONDUCT behavioral assumption and implicationprofit maximizing firmsmr = mc at x profit maxprofit maximizing firmsmr = mc at x profit maxprofit maximizing firmsmr = mc at x profit maxprofit maximizing firmsmr = mc at x profit max short-run profit could be +/0/- could be +/0/- could be +/0/- could be +/0/- long-run profit 0 0 + or 0 + or 0PERFORMANCEallocative efficiency? (NSS maximized?)yes no no yesproductive efficiency?(firm at min of lratc?) yes no probably not but perhaps probably not but perhaps p vs. mc p=mc at x profit maxp>mc at x profit maxp>mc at x profit maxp=mc at x profit maxCOMMENTS remember to think of both themarket and firm when doinganalysis in perfect comp.hard to decide on definition of market/product group, so really onlylook at the firm pictureno notion of supply CURVEremember to consider deadweight loss from themonopolist’s behaviorno supply CURVEeach unit is sold at its demand price,so the entire area of NSS goes to themonopolist as PS and CS=0!no notion of supply CURVEoligopolySTRUCTUREnumber of firms fewtype of output homogeneous or heterogeneousentry/exit often there are some barriers to entry -usually strategically createdinformation full and symmetricfirm’s demand (δ)price maker - downward slopingmarket demand (D) downward slopingCONDUCTbehavioral assumption and implicationprofit maximizing firmsmr = mc at x profit maxshort-run profit could be +/0/-long-run profit + or 0 with Cournot0 with Bertrand+ or 0 with ChamberlinPERFORMANCEallocative efficiency? (NSS maximized?)no with Cournotyes with Bertrandno with Chamberlinproductive efficiency?(firm at min of lratc?) probably not but perhapsIs p =? >? <? mc p>mc at x profit max - Cournotp=mc at x profit max - Bertrandp>mc x profit max - ChamberlinCOMMENTS keep in mind game theory and