1. Market Structure Wrap-Up
Chapter 15, 16, &17

2. Upcoming Test Unit Test Chapters 15,16 & 17
Block Day- Free Response (90 pts)
Block Day – Multiple Choice (100 pts)
Study Guide due Block Day

3. 4 Market Structures Competition Monopolistic Competition Oligopoly
Maximize Profit
When:
MR = MC
MR = MC
MR = MC
MR = MC
Equilibrium
Price vs. MC
P = MC
P > MC
P > MC
P > MC
Perfect
Competition
Monopolistic
Competition
Oligopoly
Monopoly
Long Run
Economic
Profit
Yes No No
Yes MC
Demand
& Marginal
Revenue
Curve
D = MR
End Result:
No DWL
Lowest Px
Highest Qty
Largest DWL
Highest Px
Lowest Qty

4. Efficiency Review Allocative Efficiency when P = MC
3 market structures fail as P > MC (monopoly, oligopoly, monopolistic competition)
Only Competitive firms are Allocatively Efficient
Production Efficiency when P = min. of ATC
3 market structures fail as P > min of ATC (efficient scale production)
Competitive Firms achieve it only in long run
3 Market Structures
P > MC
P > min of ATC
Competitive Markets
P = MC (always)
P = min of ATC (long run)
(Efficient Scale Production)

5. Intro: Game Theory Wrap Up
Dominant Strategy- best strategy for one player regardless of what the other player chooses
Enforceable Equilibrium- is a stable “market” equilibrium. No incentive to move/cheat!
Nash Equilibrium – a combination of strategies that each choose “best” choice in response to the other’s choice.
Every dominant strategy is a Nash Equilibrium
Not every Nash equilibrium is a dominant strategy!

6. Elasticity Review ● D MR Unit Elastic Elastic range Inelastic Range
Firms will:
Operate only in Elastic Portion of Demand
Elasticity = 1 when MR = 0 => TR at maximum