Monopoly & Oligopoly (L14)

Question 1

monopoly

Answer 1

one firm
price makers
max profit
total supply=individual supply

Question 2

oligopoly

Answer 2

compete
some influence on price

Question 3

inverse demand

Answer 3

X(p)=Y(p)
market demand determines market output, so p is found by p=X^-1 Y

Question 4

profit max monopoly

Answer 4

MR=MC
R=p(y)Y (output affects price)
use the demand function multiply by Y then differentiate to get MR
solve MR=MC for y

Question 5

profit max oligopoly

Answer 5

MR=MC solve MR with output for each firm
the result tells you how the firm will react if y1 changes to an output and vice versa (reaction curves)
solve where the reaction curves meet

Question 6

cournot equilibrium

Answer 6

where reaction curves meet
solve for y1 and y2
sub values into eachother (check notes)