perfect competition
monopolistic competition
monopoly (simple)
monopoly (perf. discriminating)
number of firms
many
several
one
one
type of output
homogeneous
heterogeneous
not applicable (but consider
substitutes in related markets)
not applicable (but consider
substitutes 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 - downward
sloping
price maker - downward sloping
market demand
downward sloping
don’t really draw one
firm is same as market
firm is same as market
profit maximizing firms
mr = mc at x profit max
profit maximizing firms
mr = mc at x profit max
profit maximizing firms
mr = mc at x profit max
profit maximizing firms
mr = 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 0
allocative efficiency?
(NSS maximized?)
yes
no
no
yes
productive efficiency?
(firm at min of lratc?)
yes
no
probably not but perhaps
probably not but perhaps
p=mc at x profit max
p>mc at x profit max
p>mc at x profit max
p=mc at x profit max
remember to think of both the
market and firm when doing
analysis in perfect comp.
hard to decide on definition of
market/product group, so really only
look at the firm picture
remember to consider dead
weight loss from the
monopolist’s behavior
each unit is sold at its demand price,
so the entire area of NSS goes to the
monopolist as PS and CS=0!
no notion of supply CURVE
no supply CURVE
no notion of supply CURVE
STRUCTURE
CONDUCT
behavioral
assumption and
implication
PERFORMANCE
p vs. mc
COMMENTS
oligopoly
STRUCTURE
number of firms
few
type of output
homogeneous or heterogeneous
entry/exit
often there are some barriers to entry usually strategically created
information
full and symmetric
firm’s demand (δ)
price maker - downward sloping
market demand (D)
downward sloping
CONDUCT
behavioral
assumption and
implication
profit maximizing firms
mr = mc at x profit max
short-run profit
could be +/0/-
long-run profit
+ or 0 with Cournot
0 with Bertrand
+ or 0 with Chamberlin
PERFORMANCE
allocative efficiency?
(NSS maximized?)
no with Cournot
yes with Bertrand
no with Chamberlin
productive efficiency?
(firm at min of lratc?)
probably not but perhaps
Is p =? >? <? mc
p>mc at x profit max - Cournot
p=mc at x profit max - Bertrand
p>mc x profit max - Chamberlin
COMMENTS
keep in mind game theory and cartels