many firms, identical products, no barriers, perfect information, price takers, horizontal demand curve (P=D=MR=AR)

MR = MC

firm produces where P = MC

P = MC and P = AC (zero economic profit)

P = minimum AC

MU = MC

shut down when P < AVC

exit market when P < AC

one firm, unique product, very high barriers, downward-sloping demand, price maker

patents, licensing, predatory pricing, price discrimination, economies of scale, tech superiority, exclusive inputs

a firm where long-run economies of scale make one producer cheapest for society

MR = MC, then price chosen from demand curve

yes, because barriers block entry

P > AC allows R&D investment

charging each consumer their maximum willingness to pay

charging different prices based on quantity or product versioning

charging different groups different prices

higher price, lower output, deadweight loss, no allocative/technical efficiency

economies of scale and increased innovation from long-run profit

many firms, differentiated products, easy entry/exit, downward-sloping demand

firms may earn profits or losses

entry erodes profit until economic profit = 0

firms do not produce at minimum AC; operate below efficient scale

product variety and differentiation

few large firms, mutual interdependence, barriers, similar or differentiated products

sum of market shares of top 4 or 8 firms (CR4, CR8)

sum of squared market shares; measures concentration

firms match price cuts but not price increases; price rigidity

strategic decision-making with payoff matrices and interdependent outcomes

no player can improve by changing strategy alone

explicit collusion to fix prices or output

unspoken understanding to avoid competition

one firm sets price, others follow

bans price fixing, collusion, and monopolization

blocks actions reducing competition (price discrimination, tying, exclusive dealing, anti-competitive mergers)

same industry merger

different production-stage merger

merger between unrelated industries

externalities, public goods, moral hazard, asymmetric information, monopoly power, inequality

MSC > MPC; overproduction in free markets

MSB > MPB; underproduction in free markets

tax used to reduce negative externality

subsidy used to increase positive externality

non-rival and non-excludable

rival but non-excludable good

individual incentives cause overuse of shared resources

graph showing income distribution compared to perfect equality

0 = equality; 1 = inequality

about 0.41 to 0.49

payment above what is needed to keep a resource employed

at high wages, workers supply less labor

single buyer of labor; minimum wage can increase employment

worker group bargaining for wages and conditions

investments in education and skills

education used to signal worker ability

value today of future money discounted over time

focus on pollution, sustainability, and resource use