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Why analyze a firm’s profit maximizing strategies under conditions of oligopoly?
Think about the purchases you make. Perhaps you’re buying groceries. Perhaps you’re going out to the movies or dinner. Maybe you’re making airline reservations for a trip. Maybe you...
Why Does a Shift in Perceived Demand Cause a Shift in Marginal Revenue?
The combinations of price and quantity at each point on a firm’s perceived demand curve are used to calculate total revenue for each combination of price and quantity. This information on...
How does advertising impact monopolistic competition?
The U.S. economy spent about $139.5 billion on advertising in 2012, according to Kantar Media Reports. Roughly one third of this was television advertising, and another third was divided ro...
Monopolistic Competitors and Entry
If one monopolistic competitor earns positive economic profits, other firms will be tempted to enter the market. A gas station with a great location must worry that other gas stations might...
How a Monopolistic Competitor Determines How Much to Produce and at What Price
The process by which a monopolistic competitor chooses its profit-maximizing quantity and price resembles closely how a monopoly makes these decisions process. First, the firm selects the p...
Choosing Price and Quantity
The monopolistically competitive firm decides on its profit-maximizing quantity and price in much the same way as a monopolist. A monopolistic competitor, like a monopolist, faces a downwar...
Who invented the theory of imperfect competition?
The theory of imperfect competition was developed by two economists independently but simultaneously in 1933. The first was Edward Chamberlin of Harvard University who published
Why analyze a firm’s profit maximizing strategies under conditions of monopolistic competition?
This module explains monopolistic competition, the second example of imperfect, or real world, competition (along with oligopoly, which you studied in the previous module). Most of what you...
THE CHOICES IN REGULATING A NATURAL MONOPOLY
So what then is the appropriate competition policy for a natural monopoly? Figure 11.3 illustrates the case of natural monopoly, with a market demand curve that cuts through the downward-sl...
Regulating Anticompetitive Behavior
The U.S. antitrust laws reach beyond blocking mergers that would reduce competition to include a wide array of anticompetitive practices. For example, it is illegal for competitors to form ...