# Forms of competition

Contents

## Perfect competition

This tutorial looks at markets that are deemed to have "perfect competition." This means that there are many players with identical products, no barriers to entry, no advantage for existing players and good pricing information. Few to no real market completely matches this theoretical ideal, but many are close. Even the example we use in this tutorial (the airline industry) isn't quite perfect (you should think about why).

Perfect competition

Conditions for perfect competition. Looking at the airline industry

## Monopoly

No, we aren't talking about the board game although the game does try to approximate what this tutorial is about--notice that you can charge more rent at either Boardwalk or Park Place if you own both (you have a "monopoly" in the navy blue market).
The opposite of perfect competition is when you have only one firm operating. This tutorial explores what this firm would do to maximize economic profit.

Monopoly basics

Thinking about what would happen with one airline. The opposite of perfect competition

Monopolist optimizing price: Total revenue.

Starting to think about how a monopolist would rationally optimize profits

Monopolist optimizing price: Marginal revenue

Plotting the marginal revenue curve for a monopolist

Monopolist optimizing price: Dead weight loss

Showing that what is optimal for the monopolist is not optimal for society

Optional calculus proof to show that MR has twice slope of demand

Using some basic calculus to show that marginal revenue has twice the slope of the demand curve for a monopolist

Review of revenue and cost graphs for a monopoly

Let's review what we've learned about monopolies

## Between perfect competition and monopoly

Most markets sit somewhere in-between perfect competition and monopolies. This tutorial explores some of those scenarios--from monopolistic competition to oligopolies and duopolies.

Oligopolies and monopolistic competition

Thinking about different markets that are in-between monopolies and perfect competition

Monopolistic competition and economic profit

Why it is hard for a monopolisitc competitor to make economic profit in the long run

Oligopolies, duopolies, collusion, and cartels

Thinking about when oligopolies behave more like monopolies or perfect competitors