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Imperfect Competition

and Monopoly
Chapter 9

Main topics:
Patterns of imperfect competition
Varieties
Sources

Marginal revenue & monopoly


Marginal revenue re-examined
Profit maximization

The marginal principle


Let the past be past

Chapter 9
Figure 9-1

Acid Test for Imperfect Competition Is


Downward Tilt of Firms Demand Curve

Patterns of imperfect competition


Varieties
Monopolistic competition
Oligopoly
Monopoly

Chapter 9
Table 9-1

Sources of imperfect competition


Market size & economic volume
Relative cost & demand factors

Barriers to entry
Legal restrictions
High cost of entry

Product differentiation
Product variation
Advertising, brands, etc

Chapter 9
Table 9-21

Chapter 9
Figure 9-2

Market Structure Depends on


Relative Cost and Demand Factors

Marginal revenue & monopoly


Marginal revenue
In imperfect competition

Profit maximization
Revenue maximization: MR = 0
Profit maximization: MR = MC

Chapter 9
Table 9-3

Chapter 9
Figure 9-3

Marginal Revenue Curve Comes


from Demand Curve

Chapter 9
Table 9-5

Chapter 9
Figure 9-4

Profit-Maximizing Equilibrium Can Be


Shown Using Either Total or Marginal
Curves

Chapter 9
Table 9-4