Lesson 9 of 9 · All lessons in this module
- Revenue, economic profit and the MR = MC ruleVideo lesson
- Breakeven, shutdown and exit decisionsVideo lesson
- Short-run and long-run costs: economies and diseconomies of scale
- The four market structures and what defines them
- Monopolistic competition: price, output and the long run
- Oligopoly: kinked demand, Cournot, Stackelberg and price leadershipVideo lesson
- Oligopoly strategy: Nash equilibrium, collusion and the long runVideo lesson
- Identifying market structure: elasticity, concentration ratios and HHI
- Integrated cases: reading a market from the data
Lesson 9 of 9 · 15 min
Integrated cases: reading a market from the data
A market-structure case hands you sales, a demand line and a cost line, and expects you to chain concentration, leader pricing, the shutdown test and classification without losing the thread.
In short
- Start by finding what is asked, then pull only the exhibit lines that feed it. Shares need total market sales, not the named firms' total.
- Concentration: CR is a sum of shares, HHI a sum of squared shares. A merger of two big firms moves the HHI far more than the CR, and neither sees entry.
- Dominant firm: output from its own MR = MC, price from its own demand line, followers supply the rest of total demand.
- Operate, shut down or exit: short run compares TR with TVC, long run compares TR with TC. Fixed costs already committed never enter the short-run choice.
- Classify by behaviour and product, not by firm count alone: a price gap between a brand and a house label signals differentiation.
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