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An often overlooked market structure is that of Oligopoly. This is far less competitive (and efficient) than the previous two. This is where a small number of large firms supply similar products in an industry. Each firms actions is influenced by the potential (forecast) retaliatory actions of its rival – which usually results in price stability (because noone wants to start a costly price war with its rivals!)

This one has quite an unusual SR equilibrium graph (the ‘Kinked’ Demand curve)…

Heres the PDF PIIGSTY Econ 101 #15 Oligopoly

Next up is the market structure with the novel title  ‘Imperfect Competition’.

This lies between the 2 extremes of perfect competition and monopoly.

Heres the PDF PIIGSTY Econ 101 #14 Imperfect Competition

Delving deeper into the theory – we start with the most competitive market structure ‘Perfect Competition.’

This is defined by ‘Many firms producing 1 basic homogenous product’

Heres the PDF PIIGSTY Econ 101 #13 Perfect Competition

Now we’re starting to get serious! The next 4 classes will examine the different market structures.

In order, from most to least competitive – you get following sequence of market structures:  perfect competition, imperfect competition, oligopoly and monopoly.

Heres the PDF PIIGSTY Econ 101 #12 Intro to Market Structures

Economics is (for the most part) about reading and interpreting graphs. In microeconomics, the important ones are the cost curves.

These will be very important for the next few lessons so…you know….make it easy on yourself and study them now

Heres the PDF PIIGSTY Econ 101 #11 Cost Curves

Now, the concept of ‘Elasticity’. Its all about how responsive consumers are to changes in the prices of the goods and services they buy every day.

• If the price goes up, and you (as a consumer) want it MUCH less than before, then you are reacting very strongly to a change in its price. The good is said to be price ‘elastic.’
• Similarly if you react very little or not at all (and carry on buying the same amount), then the good is price ‘inelastic.’

Heres the PDF PIIGSTY Econ 101 #10 Elasticity

Heres what all the theory looks like in diagrams…

A concept that comes up very frequently is that of Consumer and Producer surplus.

The key here is willing to pay (for consumers) and willingness to produce (for producers)

Heres the PDF PIIGSTY Econ 101 #9 Consumer and Producer Surplus

To understand basic economics means understanding how supply and demand interact. Although in real world terms its difficult to measure, in theory the optimal (equilibrium) price and quantity demanded is found by seeing where these two curves meet. But these curves move, as you saw in #6 and #7. Putting #6 and #7 together…lets look at some graphs and then talk about equilibrium price and quantities.

Heres the PDF  PIIGSTY Econ 101 #8 Market Equilibrium

First, the basic interaction of supply and demand. If supply exceeds demand, there is excess supply (@ Price =P1). If demand exceeds supply, there is  excess demand (@ Price = P2)

Now, lets look at the interaction between demand and supply and show how changes in both can change the optimal/equilibrium price and quantity in the marketplace for Good X.

Now that we’ve covered demand and what factors influence it, next up is its close companion ‘Supply’

This class details three specific (non-ordinary) cases of supply and what factors affect supply generally.

Heres the PDF PIIGSTY Econ 101 #7 Supply

Now we get more into the nuts and bolts of economics (contain yourself, please). Next topic up is ‘Demand.’ It details what factors affect demand and how goods are classified accordingly.

Heres the PDF  PIIGSty Econ 101 #6 Demand