◆ FIRMS & MARKETS
Imperfect Competition
Monopolistic competition, oligopoly, and game theory.
18 articles
FeaturedMarkup: How Much Above Cost Does a Firm Price?
Markup is the percentage difference between a firm's price and its marginal cost. It measures the degree of market power — competitive firms have near-zero…
Read more →Deep Dives
9 articles
◆ IMPERFECT COMPETITION
↔ Also in The Firm & ProductionReturns to Scale: What Happens When You Double Everything in a Production Process
Double every input — does output double, more than double, or less? Returns to scale answers that, and it explains why some industries have giants and others…
◆ IMPERFECT COMPETITION
↔ Also in The Firm & ProductionWhat Happens When a Company Doubles in Size? Economies and Diseconomies of Scale
Growing bigger can make every unit cheaper — until it doesn't. Economies of scale pull costs down as a firm expands; diseconomies push them back up.
◆ IMPERFECT COMPETITION
Product Differentiation: Why Some Businesses Get to Set Their Own Price
Product differentiation is how a business escapes the price-taker trap. Here is the economic logic, the four levers, and the math on what a premium is worth.
◆ IMPERFECT COMPETITION
Short-Run Profit, Long-Run Erosion: What Happens When Rivals Enter Your Market
In monopolistic competition, profit attracts entry, and entry competes the profit away. Follow the chain from a hot launch to the day profit hits zero.
◆ IMPERFECT COMPETITION
Advertising Isn't Just Persuasion. Here Is What It Actually Does to Markets.
The belief that advertising only manipulates is incomplete. Economists find it also carries real information, signals quality, and can sharpen competition.
◆ IMPERFECT COMPETITION
Game Theory: How to Think When Someone Else Is Thinking Back
Game theory is the study of decisions where your best move depends on what someone else does. Here is the logic, worked through.
◆ IMPERFECT COMPETITION
The Prisoner's Dilemma: Why Rational Rivals End Up Worse Off Together
In the prisoner's dilemma, two players each make the rational choice and both end up worse off. Here's the logic, the math, and why it matters.
◆ IMPERFECT COMPETITION
Cartels, Collusion, and Why Every Price-Fixing Scheme Eventually Breaks Down
Cartels fix prices to act like a monopoly, but each member gains by cheating. Most unravel from within. Here is how the economics actually work.
◆ IMPERFECT COMPETITION
Nash Equilibrium: How Strategic Thinking Changed the Way Economists Model Markets
A Nash equilibrium is a stable point where no player can do better by changing strategy alone.