price-maker - monopoly offers only 1 source for a given good  

• firms in competitive market take the price of the market
  • can't charge higher than market price or else will lose all profit
• monopoly forms the entire supply curve in forming a market equilibrium
• will still maximize profits where MR = MC
• monopoly promotes barriers to entry
  • no longer a monopoly if free entry was possible
• average revenue = P(q)
  • P(q) given by market demand
  • no other competition to decide price
• marginal revenue = d[P(q)q]/dq

equilibrium price  

• find quantity that needs to be produced from MR=MC
• plug that quantity into the market demand function to find market price
• multiplant production - monopoly has different plants w/ different production
  • use total marginal product to find total quantity that needs to be produced
  • use the price (not market price) that corresponds to total quantity and the marginal cost functions for each individual plant to find how much each will produce

• demand
• marginal revenue
• marginal cost
• p* = market price
• q = quantity at the intersection of marginal revenue and cost
• MR = P + P(1/E_demand)
• more elastic >> price mark-up decreases (p*-p decreases)

monopolistic competition - products still distinct but possibly substitutes  

• ie. soda brands
• product differentiation - firms try to differentiate their product from that of other firms
  • otherwise, each firm bound by prices set by other firms
• each firm now faces a different demand curve