Perfect Competition

Monopolistic Competition

Oligopoly

Monopoly

Monopoly
Single firm, unique product, no competition, full control over prices

Barriers to Entry
 Economies of scale – if you produce more, your cost per item will go down
 Brand loyalty
 Sunk costs, starting costs
 Legal restrictions – e.g. patents
 Aggressive tactics
 Intimidation

(Dis)Advantages of Monopoly
+ Economies of Scale

- High prices / low output: short run

- High prices / Low output: Long run

- Lack of incentive to innovate

- Inefficiency

Contestable Markets
- Low entry costs
- Low exit costs