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

Theory of the Firm REVIEW