Firm Level Economics: Markets and Allocations

Description

In this class, we will derive equilibrium outcomes across a variety of market structures. We will begin by understanding equilibrium under a market structure called Perfect Competition, a benchmark construction. Economists have tools to measure the efficiency of market outcomes. We next consider the polar extreme of a competitive market: a monopoly market. We will determine the monopoly equilibrium price and quantity and efficiency properties. Much economic activity takes place in markets with just a handful of very large producers. To understand equilibrium in these oligopoly markets requires more careful attention to strategic interdependence. To capture this interdependence, we consider collusive arrangements among a small number of rivals as well as the use of simple game theoretic techniques to model equilibrium. Market Failure describes situations where markets fail to find the efficient outcome. Information asymmetries are one fertile form of market failure. Another form of market failure occurs when externalities are present. We will examine one key externality, pollution, and construct a policy prescription to mitigate the negative efficiency impacts of this externality. Upon successful completion of this course, you will be able to: • Explain how different market structures result in different resource allocations. • Model the impact of external shocks to a particular market structure and demonstrate the new equilibrium price and quantity after the impact of this external shock has played out. • Evaluate the efficiency of an equilibrium. Different market structures produce different levels of efficiency. • Explain when and why the government might intervene with regulatory authority or antitrust litigation to lessen inefficiencies in some markets. • Describe how information problems can cause inefficient outcomes. • Understand externalities and consider optimal government response to these market failures.



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Frequently Asked Questions

What is Firm Level Economics: Markets and Allocations by University of Illinois at Urbana-Champaign?

Firm Level Economics: Markets and Allocations is a learning resource for Microeconomics. It is available in the following format(s): Game and Online class. It is suited for College students.

What grade level is Firm Level Economics: Markets and Allocations by University of Illinois at Urbana-Champaign appropriate for?

It is designed for College students, but could be useful for students of other ages as well; please look at the description and images to determine suitability.

How much does Firm Level Economics: Markets and Allocations by University of Illinois at Urbana-Champaign cost?

It is free!