The Power of Markets III: Input Markets and Promoting Efficiency

The final module of Power of Markets explores firm behavior in imperfectly competitive markets. It examines how firms with monopoly power increase profits through price discrimination and what price-output combinations firms can choose in the face of oligopoly and monopolistic competition. We will also examine monopolies from a efficiency perspective, and consider the impact of imperfect information on consumer and firm behavior. Next, we will explore input markets. This is how a firm, industry or the entire market determines the demand. We will also examine the factors that influence input supply, and how it interacts with the demand to determine input prices. To analyze government policies and institutions such as the NCAA Sports Cartel, the minimum wage and Social Security, we will use input market theory. We will also discuss market efficiency, including what government can do and how it may be diminished.