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The chapter discussed the different types of markets where
imperfect competition prevails: monopoly, monopolistic competition, and
oligopoly. Monopoly is a type of market structure where there is only one seller
of the product in the market. A monopolist applies price discrimination to
increase his total revenue and profits.
In monopolistic competition, there are a large number of buyers and sellers, the
products are differentiated yet they are close substitutes. In an oligopoly
market, firms produce either a homogeneous product or products that are close
but not perfect substitutes. In this market there are few large players.
Competing oligopolists may form cartels to maximize joint profits. |
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Short Case Studies / Caselets
