Core concepts
- 01Perfect Competition: many sellers, homogeneous product, free entry, price takers.
- 02Monopoly: single seller, no close substitute, high barriers, price maker.
- 03Monopolistic competition: many sellers, differentiated product, easy entry.
- 04Oligopoly: few sellers, interdependent decisions, price rigidity (kinked demand).
- 05Equilibrium condition for firm: MR = MC.
Flowchart summary
Markets Spectrum Perfect Comp -- Mono. Comp -- Oligopoly -- Monopoly (many,homog) (many,diff) (few) (one) | | | | price-taker differentiated kinked price-maker
Exam-critical pointers
- ⭐Long-run profit: only normal profit in perfect & monopolistic competition.
- ⭐Price discrimination requires market segmentation and no resale.
- ⭐Cartels in oligopoly tend to be unstable (incentive to cheat).
- ⭐Kinked demand curve (Sweezy) explains price rigidity in oligopoly.
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