Page 34 - FINAL CFA SLIDES DECEMBER 2018 DAY 5
P. 34
LOS 15.f: Describe pricing strategy Session Unit 4:
under each market structure., p.40. 15. The Firm & Market Structures
Perfect Competition
Monopoly Downward sloping D: P > MR/MC
Monopolistic Competition Downward sloping D: P > MR/MC
Oligopoly
l cost structures, optimal Q is same!
1. Kinked But MR curve is discontinuous, for many
2. Collusion But charge higher price from industry demand
Curve such as in monopoly but they must agree
to share the output and the economic profits
3. Dominant firm model But charge higher price from industry demand!
4. Game theory Price between monopoly price (if they
successfully collude and the perfect
competition (if potential competition
rules out prices above that level)
