Theory of the Firm

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  • Theory of the firm
    • Perfect Competition
      • Many small firms
      • Homogeneous goods
      • Perfect knowledge
      • No barriers to entry
      • No price setting power
    • Monopolistic Competition
      • Many small firms
      • Similar goods
      • Imperfect knowledge
      • Low barriers to entry
      • Can set price to an extent
    • Oligopoly
      • A few large firms
      • Goods with similar charecteristics
      • Imperfect knowledge
      • High entry barriers
      • Tend to agree price fixing deals
    • Monopoly
      • One firm
      • Unique products
      • Imperfect knowledge
      • High entry barriers
      • Price makers
    • Contestable Markets
      • No sunk costs
      • Low entry barriers
    • Monopsony
      • Powerful buyer
      • Many sellers

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