00:01
So here we're talking about the implications of market structure.
00:05
And we, a lot of the questions about oligopoly, but the answers all relate to competition and monopoly.
00:12
So let me just remind you what competition and monopoly look like, right? if we think of a market as quantity price, we've got some sort of marginal cost, we've got some sort of marginal benefit, right? competition equates marginal costs and marginal benefit, right? that's what competition does.
00:34
If people try to price more aggressively, right? if they try to price above the competitive price, other people would enter the market and undercut them in search of those profits.
00:45
What a monopolist does, however, is because they have control over the market, they don't care about competition.
00:52
They limit the quantity by setting marginal revenue equals to marginal cost, which yields a monopoly price and a monopoly quantity, very basically speaking, right? so competition, you have a low price, which means a high quantity, and that low price is enforced by competition.
01:13
When a monopolist has control, they artificially limit quantity to drive up the price and make profits.
01:18
Now, the question is, where does oligopoly come in? intuitively, oligopoly should be between monopoly and competition, because it literally is.
01:36
Competition is you have an infinite number of firms competing or a near infinite number of firms competing.
01:42
Monopolis, you have one firm...