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unit 4: Perfect and Imperfect Competition - Coggle Diagram
unit 4: Perfect and Imperfect Competition
Oligopoly
Limited Price Control (interdependence)
Significant Obstacles for market entry
Standard or Differentiated Products
Product Differentiation (nonprice competition)
Few firms
Monopolistic Compitition
Limited Price Control
Relative easy market entry
Differentiated Products
Advertising, Brand names Trademarks (nonprice competition)
Many firms (less than pure Competition)
Measurement
Four Large Concentration ratio
Herfindahl Index
Price Out Put
Short Run: Profit Loss
Long Run: Normal Profit
Efficiency
Excess Capacity
Allocative
Productive
Pure Competition
Standard Products
No price control
Large Firm no. of firms
Easy market entry
No nonprice competition
Perfectly Elastic Demand
Total Revenue
Marginal Revenue= Price
Average revenue
Price Taker Firms
Pure Monopoly
Unique Products
Considerable Price Control
Only 1 firm
No Market entry for other firms
Advertising & Public Relations (nonprice competition)
Profit Maximization/ Loss minimization
Shut down Case
What quantity of the product should be produced?
Will production yield a profit?
Should a firm produce?
Marginal Revenue-Marginal Cost Approach
Total revenue-Total cost approach
Economic Profit:
Normal Profit (Break Even)