Firm Behavior and Market Structure

25-35% of the AP Test
Click on the links below the video to see where MR=MC occurs in DIFFERENT market structures.
Perfect competition
Profit maximization
Short-run supply and shutdown decision
Behavior of firms and markets in the short run and in the long run
Efficiency and perfect competition

Monopolistic competition
Product differentiation and role of advertising
Profit maximization
Short-run and long-run equilibrium
Excess capacity and inefficiency

 Sources of market power
 Profit maximization
 Inefficiency of monopoly
 Price discrimination
 Natural monopoly

Interdependence, collusion and cartels
Game theory and strategic behavior