Lesson Plan
Monopoly and Perfect Competition Compared
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I. Definitions of Efficiency
- - technological efficiency
- - firm technological efficiency
- - industry technological efficiency
- - allocative efficiency
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II. Evaluating Perfectly Competitive and Monopoly Markets
- - perfectly competitive markets
- - technological efficiency
- - allocative efficiency
- - monopoly markets
- - technological efficiency
- - allocative efficiency
- - public policy given this analysis
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III. Exceptions to the Analysis
- - contestable markets
- - externalities
- - theory of the second best
- - economies of scale (natural monopoly)
- - economies of scope
- - innovation
- - price discrimination
- - definition
- - examples of price discrimination
- - 3 requirements for a firm to be able to price discriminate
- - graphically
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IV. Public Policy
- - antitrust
- - regulation