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College ECON Notes

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Economics college class notes are comprehensive collections of information and concepts covered in undergraduate-level economics courses. These notes serve as study aids, summarizing lectures, textbook readings, and applied examples. They are divided into two main branches: microeconomics and macro...

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  • November 20, 2024
  • 1
  • 2024/2025
  • Class notes
  • Colleen carey
  • All classes
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2. Market Structures

A. Perfect Competition

● Characteristics:
○ Many buyers and sellers.
○ Homogeneous products.
○ Free entry and exit.
○ Perfect information.
● Result: Firms are price takers, P = MC (allocative efficiency).

B. Monopoly

● Characteristics:
○ Single seller.
○ Unique product with no close substitutes.
○ High barriers to entry (legal, natural).
● Result: Price maker, P > MC, inefficiency due to deadweight loss.

C. Monopolistic Competition

● Characteristics:
○ Many sellers.
○ Differentiated products.
○ Some pricing power.
● Result: Long-run equilibrium where P > MC but no supernormal profits.

D. Oligopoly

● Characteristics:
1. Few large firms dominate.
2. Interdependence of firms.
3. Potential for collusion or price wars.
● Models:
1. Cournot (quantity competition).
2. Bertrand (price competition).
3. Stackelberg (leader-follower dynamics).

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