Monday, March 22, 2010

Monopolistic Competition and Oligopoly

OBJECTIVES 

Students shall be able to

1. Define monopolistic competition.

2. List the characteristics of monopolistic competition.

3. Determine the profit-maximizing price and output level for a monopolistic competitor in the short run when given cost and demand data.

4. Explain why a monopolistic competitor will only realize a normal profit in the long run.

5. Identify the reasons for excess capacity in monopolistic competition.

6. Explain how product differentiation may offset these wastes.

7. Enumerate the principal types of nonprice competition.

8. Define oligopoly.

9. List characteristics of oligopoly markets.

10. List examples of oligopolies.

11. Explain what is meant by mutual interdependence in an oligopoly market.

12. Discuss the merits of regulation of oligopolies.

13. Describe the concentration ratio as a way to measure market dominance in an industry.

14. Differentiate between homogeneous and differentiated oligopolies.

15. Identify and explain the most important causes of oligopoly.

16. Identify three possible models of oligopolistic price-output behavior.

17. Use the kinked demand curve theory to explain inflexible prices.

18. List the major advantages of collusion for an oligopolist, three types of collusion, and obstacles to collusion.

19. Explain price leadership as a form of tacit collusion.

20. Explain why oligopolies may prefer nonprice competition over price competition.

21. List three common forms of nonprice competition in oligopolistic industries.

22. List the positive and negative effects of advertising.

 

ACTIVITIES

1. Students shall watch "Economics USA: Oligopolies."

2. Students shall answer questions about "Economics USA: Oligopolies."

Assignments:

1. Watch "Economics USA: Oligopolies."

2. Answer questions about the film. [Word document or PDF document]

ASSESSMENT PROCEDURES

Monitor and adjust as necessary.