-In the imperfect market structure, there is imperfect market information and immobility of factors of production. The number of firms ranges from few to many and the product can be heterogeneous or homogeneous. There is slight to great market control as firms can create their own market share.

-In the monopoly form of market structure, there is imperfect market information and mobility of factors of production. There is only one firm and the product is homogeneous. The firm has strong market control as it can impose strong barriers to entry, either naturally or artificially. The firm in this industry is price-setter whereby the firm can set the price or the quantity level.

-In the oligopolistic form of market structure, there is imperfect market information and mobility of factors of production. There are a few firms and the product is differentiated. The firms have strong market power as they can create barriers-to-entry but the firms are mutually interdependent. The firm in this industry is price-setter whereby the firm can set the price or the quantity level.

-In the monopolistic form of market structure, there is imperfect market information and mobility of factors of production. There are many firms and the product is highly differentiated. The firm also possesses slight market power as it can create its own market share through product differentiation but the control of the market is limited. The firm in this industry is price-setter whereby the firm can set the price or the quantity level but has a high degree of substitution, contributing to the presence of a price-elastic demand curve.

- Single producer

- No close substitutes for the product

- Imperfect knowledge of product

- High barriers to entry What are the characteristics of an oligopolistic firm? -small numbers of large firms relative to market size

- Products can be homogeneous or differentiated -imperfect knowledge

- Existence of substantial barriers to entry

-large numbers of buyers and sellers

-differentiated products

-no/low barriers to entry

-imperfect knowledge

-Supernormal profit

-Supernormal profit

-Supernormal profit

-Firms in monopolistic competition reap supernormal profits in the short run. Due to low barriers to entry, more firms enter the industry to reap the supernormal profits. Assuming total market demand for the product remains the same, the entry of new firms will cause demand for each firm to fall. At the same time demand also becomes more price elastic. Hence firms in monopolistic competition can only reap normal profit in the long run.

-Supernormal profits

-Supernormal or normal profits

-Normal profits

-Market power refers to the ability to set price or output and to price discriminate

-The greater market power a firm has, the greater its ability to set price or output level.

-The greater the market power a firm has, the greater its ability to produce at a higher output level

-They are conditions that prevent or impede the entry of new firms into an industry. These barriers can limit the amount of competition faced by existing firms in the industry.

-Artificial barriers to entry are those set up by the firms to prevent entry of new firms. Eg legal barriers like patent rights, collusion/mergers, non-price competition like product differentiation

-They are natural conditions that prevent a firm from entering the industry. Eg significant cost reduction arising from economies of large scale production, control over supplies of input

-Artificial barriers to entry set up through aggressive advertising and product differentiation.

-product differentiation

-advertising

-research and development

-branding

-It involves making artificial changes to a product in order to make it seem different or special as compared to the competitor’s goods. One example would be difference in packaging.

- This model explains why once a price-output combination has been decided upon and the oligopolistic firms will not want to experiment with further price changes.

-When the firm increases price, the rival firm will not increase price as the rival firm can gain as the customers will switch the consumption from the firm to the rival firm. This will lead to a large reduction in quantity demanded since the degree of substitution is large, contributing to the demand curve for this portion to be price-elastic. However, when the firm decreases the price, the rival firms will follow suit as they will lose out if the customers of the rival firms may switch the demand to the firm. This means a smaller degree of substitution which will lead to a less than proportional increase in quantity demanded, contributing to the demand curve for this portion to be price-inelastic. It also implies that there is price rigidity as the firm is unlikely to change price as there is little to gain from price changes unless there is large percentage change in cost condition. This reflects that there is high degree of mutual interdependency which contributes to the condition of price rigidity.

-Allocative efficiency is a type of economic efficiency in which economy/producers produce only those types of goods and services that are more desirable in the society and also in high demand. Allocative efficiency is a point where marginal benefit is equal to marginal cost (MB=MC)

-Productive efficiency occurs when the economy is utilizing all of its resources efficiently. The concept is illustrated on a production possibility curve where all points on the curve are points of maximum productive efficiency.

-Main aims of firms will be to maximize profits and reduce costs

-X-inefficiency is the difference between efficient behavior of businesses assumed or implied by economic theory and their observed behavior in practice caused by a lack of competitive pressure.

-The firms will not be able to attain allocative efficiency as the firms focuses on profit maximization in which production level is at where the marginal cost is equal to the marginal revenue. This is below the social efficiency level of production, in which the production level is at where price is equal to marginal cost. This is so as the downward sloping demand curve due to the market power of the firms will contribute to the difference of the production in the SR.

-The firms are unlikely to produce at the optimal capacity of production where the average cost of production is lowest as the firms are usually producing at the excess capacity of production.

-Firms are profit-motivated as it is financially advantageous. Additional profits can serve as a reward to business owners or employees, redirected into further investments to boost earnings or paid out as dividends to investors.

-Profit maximization is the process by which firms determine the price and output level which brings in the greatest profits. Profit maximization occurs when MC=MR with MC rising (on the graph).

-All firms will try to minimize costs in order to maximize profits. Cost minimization occurs when the firm find means to cut down on overhead and variable costs.

-Two tier charge refers to charging the same good or service two different prices to two different group of consumers.

-MC pricing is a price regulation method at which the government requires monopolies to set price at marginal costs.

-A natural monopoly is a condition of an industry whereby it is most efficient (involving the lowest long-run average cost) for production to be concentrated in a single firm.

-Capital intensive industries, like the utilities industries, have huge overhead costs and hence set the condition for natural monopoly to exist so as to prevent expensive duplication of services.

-Monopolist competition

-Monopoly

-MC pricing

-Where there is market dominance, firms have the capacity to distort the market price and quantity to their advantage. When there is market distortion which results in deadweight loss and unequal distribution of income, the government should regulate monopolies.

-Firms with market power can distort the market price and fix high prices which result in unequal distribution of income between consumers and producers, hence resulting in consumer exploitation.

-It refers to the public ownership of the entire industry.

-It is the process of removing a legal prohibition or regulation against something which is currently not legal.

-Price regulation refers to government intervention in monopoly price when there is market distortion of prices. This is to ensure that there is allocative efficiency and equal distribution of income between producers and consumers.

-Perfect mobility refers to the efficient ability to move factors of production - labor, capital or land - out of one production process into another.

-Allocative and production efficiency can be attained at production equilibrium based on profit maximisation, where MC=MR.

-Under this market structure, the marginal revenue and average revenue is downward sloping from left to the right due to the market power and thus, allowing it to exercise as a price setter while the marginal cost will rise as there is over-utilization of fixed capacity of production. As a profit maximizing firm, it will produce at the level of output where the marginal revenue is equal to the marginal curve.

-Under this market structure, the marginal revenue and average revenue is downward sloping from left to the right as it can exercise as a price setter due to the market power while the marginal cost is rising due to over-utilization of fixed capacity of production in short run. Additionally, the MR and AR is  kinked with the portion being price-elastic when price and the portion being price-inelastic when price. As a profit maximizing firm, it will attain production equilibrium, where the marginal revenue is equal to the marginal cost.

-Under this market structure, the marginal revenue and average revenue is downward sloping from left to the right as it can exercise as a price setter due to the market power while the marginal cost rises due to over-utilization of fixed capacity of production in short run. As a profit maximizing firm, it will attain production equilibrium at the level of output where the marginal revenue is equal to the marginal curve.

-Monopolistic competitive firms possess slight market power as it can create its own market share through product differentiation but the control of the market is limited. The firm in this industry is price-setter whereby the firm can set the price or the quantity level but has a high degree of substitution, contributing to the presence of a price-elastic demand curve.

-Cost condition refers to the level of cost of production which will affect the pricing and output decisions of a firm.

-Licensing raises the cost condition of the licensees, hence lowering their competitive advantage as compared to the licensor. The licensor gains market power and sets output and price level at production equilibrium at MC=MR. However, this is not equal to production at P=MC or min AC which promotes allocative and production inefficiency. Therefore, the society suffers from a welfare loss which is the value of deadweight loss.

-Intellectual property rights create market power of the firm, seen in terms of downward-sloping MR and AR. Production equilibrium at MC=MR will not be equal to production at P=MC or min AC as the production is at the excess capacity. As a result, allocative and production inefficiencies arise. Consequently, there will be welfare loss in which is the value of deadweight loss in the society.