micro economics chapter 13

Monopolistic Competition and Oligopoly 13... Price and Output in Monopolistic Comp monopoly because there are more rivals and substitutes competition because there are fewer rivals and i

Monopolistic Competition

and Oligopoly

13

Monopolistic Competition

•

Monopolistic Competition

Price and Output in Monopolistic

Comp

monopoly because there are more rivals and substitutes

competition because there are fewer rivals and imperfect substitutes

Monopolistic Competition:

Efficiency

products

Oligopolistic Industries

High Concentration Industries

(1)

Industry

(2)

4-Firm Concentration Ratio

(3) Herfindahl Index

(1) Industry

(2)

4-Firm Concentration Ratio

(3) Herfindahl Index

Primary copper 99 ND Petrochemicals 85 2662 Cane sugar refining 99 ND

Small arms ammunition 83 1901 Cigarettes 95 ND Motor vehicles 81 2321 Household laundry

equipment 93 ND

Men’s slacks and jeans 80 2515 Beer 91 ND Aircraft 81 ND

Electric light bulbs 89 2582 Breakfast cereals 78 2521

Glass containers 88 2582 Household vacuum cleaners 78 2096 Turbines and

generators 88 ND Phosphate fertilizers 78 1853

Household

refrigerators and

freezers 85 1986

Tires 77 1807 Electronic

computers 76 2662 Primary aluminum 85 ND Alcohol distilleries 71 1609

3 Oligopoly Models

Kinked Demand Curve

Overt Collusion

improves control of price, profits rise, and prevents entry of firms

that collude

members

Covert Collusion

social settings between firms about price and output

Obstacles to Collusion

Global Perspective

Price Leadership Model

changes

firms

Oligopoly and Efficiency