9772

Market Structure and Market Power in Oligopoly

The analysis of different market structures, particularly with regard to welfare effects, is an important topic in most industrial organizations and in microeconomics courses. The traditional approach is to demonstrate the effects of different assumptions regarding the market structure by relying on relatively simple comparative statistics. This method inhibits a deeper theoretical discussion. The present interactive economic model is based on an extension of a typical textbook model. Our Demonstration facilitates the parallel variation of several structural parameters, like the number of firms, cost functions, etc., and the visualization of the impact on market outcomes. It can be used to develop an intuition for the effects of different assumptions regarding the market structure, like the cost functions. The Demonstration also lets you look at market power, employing the well-known Lerner index, and includes a simplified notion of market contestability, capturing the effect of potential competition on market performance.
quantity per firm
demand function,
market price
marginal costs
total cost function,
average total costs
profit per firm
industry profit ()
consumer surplus
total welfare ()
Lerner index
average margin
number of firms

SNAPSHOTS

  • [Snapshot]
  • [Snapshot]
  • [Snapshot]
  • [Snapshot]
    • Share:

Embed Interactive Demonstration New!

Just copy and paste this snippet of JavaScript code into your website or blog to put the live Demonstration on your site. More details »

Files require Wolfram CDF Player or Mathematica.









 
RELATED RESOURCES
Mathematica »
The #1 tool for creating Demonstrations
and anything technical.
Wolfram|Alpha »
Explore anything with the first
computational knowledge engine.
MathWorld »
The web's most extensive
mathematics resource.
Course Assistant Apps »
An app for every course—
right in the palm of your hand.
Wolfram Blog »
Read our views on math,
science, and technology.
Computable Document Format »
The format that makes Demonstrations
(and any information) easy to share and
interact with.
STEM Initiative »
Programs & resources for
educators, schools & students.
Computerbasedmath.org »
Join the initiative for modernizing
math education.
Step-by-step Solutions »
Walk through homework problems one step at a time, with hints to help along the way.
Wolfram Problem Generator »
Unlimited random practice problems and answers with built-in Step-by-step solutions. Practice online or make a printable study sheet.
Wolfram Language »
Knowledge-based programming for everyone.
Powered by Wolfram Mathematica © 2014 Wolfram Demonstrations Project & Contributors  |  Terms of Use  |  Privacy Policy  |  RSS Give us your feedback
Note: To run this Demonstration you need Mathematica 7+ or the free Mathematica Player 7EX
Download or upgrade to Mathematica Player 7EX
I already have Mathematica Player or Mathematica 7+