Types
Perfect Competition
- prices are given
- all producers need to produce and sell at exact equilibrium price
- 0 profit, but large turnover
- fight over market share, rather than profit margins
- requires homogeneous products
Monopolistic Competition
- different products, plenty providers
- different products → profits in short run
- low entry barriers → no profits in long run
- demand becomes perfectly elastic
- no loss of surplus
Cournot Competition
- Cournot Model
- same products, few providers
Bertrand Competition
- Bertrand Model
- different products, few products
Stackelberg Competition
- Stackelberg Model
- first-mover advantage
Product Differentiation
- Vertical Diff
- quality
- Horizontal Diff
- taste
Modelling
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Summary
