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Chapter 20 - "The Costs of Production": We finished our last unit with a discussion of consumer behavior, where we learned that consumers attempt to maximize their total utility by consuming the combination of goods and services where the last dollar spent on each product yielded the same marginal utility. Great, interesting, but what about FIRMS? A firm's decision as to what to produce and how to produce it is based on the firms costs of production. This cnapter will introduce some of the costs firms face.

Chapter 21 - "Pure Competition": Not all markets are the same. Some have only one producer, while others may have a handful of firms, and other still may be extremely competitive with hundreds of firms. The number of firms in a market has grave implications on the level of efficiency a market will achieve. This chapter looks at markets with very large numbers of firms, otherwise known as "purely competitive" markets

Chapter 22 - "Pure Monopoly": On the other extreme from pure competition is a market in which one firm controls all output. This is a monopoly. Many of the products we consume come from monopolized (or close to it) industries. How does a monopolist decide how much of its product to produce and the price it should charge if it does not have competitors forcing its price lower? What are the implications of monopolies on efficiency? This chapter explores these questions and more.

Chapter 23 - "Monopolistic Competition and Oligopoly": In between the two extremes of pure competition and pure monopoly lie the market structures most common in the real world. In these two market structures, firms compete based not solely on price rather on differentiation of their products through quality, brand recognition, and so on. These two market structures share certain characteristics of both pure competition and pure monopoly, which has certain implications on efficiency and output.

Unit II C and D Student Thought Forum

Unit II C and D AP Econ in the News