Goals:

• To explain how Duopoly and Oligopoly works
• To explain price-based competition (Bertrand)\

To achieve these goals, we build on the definitions from Perfect Competition:

• Profit
• The Short Run (SR) v. The Long Run (LR)
• Production Function
• Principle of diminishing returns
• Firm Production Decision
• Profit Maximization Rule

Oligopolistic Competition

Introduction to oligopolies, introduce the special case of duopolies.

Bertrand competition

Price setting