ECO/561 Version 9 / 1
Week Three Student Guide
This week’s topics include how supply and demand, revenue, profit maximization, and the various cost concepts apply to different market structures. When introducing the market structures, the readings and discussions illustrate why different firms mightutilize different techniques to increase business—that is, which business types would utilize pricing strategies andnonprice strategies to meet goals, which businesses need to consider advertising and what type of advertising, and which businesses may need to consider cost-reduction strategies to improve profitability.
Market Structure
OBJECTIVE:Determine pricing strategy to meet organizational goals.
Resource:Ch. 9–11 of Economics
Content
- Ch. 9: Pure Competition
- Four Market Models
- Pure Competition: Characteristics and Occurrence
- Demand as Seen by a Purely Competitive Seller
- Profit Maximization in the Short Run: Total-Revenue–Total-Cost Approach
- Profit Maximization in the Short Run: Marginal-Revenue–Marginal-Cost Approach
- Marginal Cost and Short-Run Supply
- Profit Maximization in the Long Run
- Pure Competition and Efficiency
- Ch. 10: Pure Monopoly
- An Introduction to Pure Monopoly
- Barriers to Entry
- Monopoly Demand
- Output and Price Determination
- Economic Effects of Monopoly
- Price Discrimination
- Regulated Monopoly
- Ch. 11: Monopolistic Competition and Oligopoly
- Monopolistic Competition
- Price and Output in Monopolistic Competition
- Monopolistic Competition and Efficiency
- Product Variety
- Oligopoly
- Oligopoly Behavior: A Game-Theory Overview
- Three Oligopoly Models
- Oligopoly and Advertising
- Oligopoly and Efficiency
OBJECTIVE:Determine ways to create nonprice barriers to entry based on market structure.
Resource:Ch. 10 of Economics
Content
- Ch. 10: Pure Monopoly
- An Introduction to Pure Monopoly
- Barriers to Entry
- Monopoly Demand
- Output and Price Determination
- Economic Effects of Monopoly
- Price Discrimination
- Regulated Monopoly
OBJECTIVE:Determine ways to increase product differentiation based on market structure.
Resource:Ch. 11of Economics
Content
- Ch. 11: Monopolistic Competition and Oligopoly
- Monopolistic Competition
- Price and Output in Monopolistic Competition
- Monopolistic Competition and Efficiency
- Product Variety
- Oligopoly
- Oligopoly Behavior: A Game-Theory Overview
- Three Oligopoly Models
- Oligopoly and Advertising
- Oligopoly and Efficiency
OBJECTIVE:Determine ways to reduce costs for an organization.
Resource:Ch. 10, 11,11W of Economics
Content
- Ch. 10: Pure Monopoly
- An Introduction to Pure Monopoly
- Barriers to Entry
- Monopoly Demand
- Output and Price Determination
- Economic Effects of Monopoly
- Price Discrimination
- Regulated Monopoly
- Ch. 11: Monopolistic Competition and Oligopoly
- Monopolistic Competition
- Price and Output in Monopolistic Competition
- Monopolistic Competition and Efficiency
- Product Variety
- Oligopoly
- Oligopoly Behavior: A Game-Theory Overview
- Three Oligopoly Models
- Oligopoly and Advertising
- Oligopoly and Efficiency
- Ch. 11W: Technology, R&D, and Efficiency
- Invention, Innovation, and Diffusion
- Role of Entrepreneurs and Other Innovators
- A Firm’s Optimal Amount of R&D
- Increased Profit via Innovation
- Imitation and R&D Incentives
- Role of Market Structure
- Technological Advance and Efficiency
Note. The information above is intended to help you complete your assignments. Read chapters in their entirety, as indicated in the syllabus. Additional information from sections not outlined above may be needed for classroom discussions.