G. Imperfect Competition

This section of the Handbook examines situations where an individual firm or firms are big enough to be able to affect the price or quantity in a market.

The first part of this section examines monopoly, where there is a single firm serving the entire market. We examine how a monopolist will use their market power to maximize profits and the effect this will have on the market price, market quantity and the efficiency properties of the market.

The second part of this section examines price discrimination, that is, when a firm is able to charge different prices to its different customers. We examine how such a firm determines its profit maximizing set of prices and again consider the effect this has on the market and its efficiency properties.

The third part of this section examines oligopoly, that is, when there are a few large firms in the market. It examines aspects of collusion and/or strategic competition among the firms.