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The first characteristic is that the products are homogenous, meaning there is little difference between the quality of the goods being sold by the individual firms.

The second characteri...

A firm can have a number of objectives some of which can carry drawbacks. (All these objectives can also be accompanied with diagrams.)

1.Profit Maximisation ( at the point MC=MR)

When aggregate demand increases from AD1 to AD2, frms are unable to meet the growing demand with their current stocks and so start to expand output. This requires them to employ more workers. Thus, unempl...

Monopolistic firms often experience Economies of Scale which makes their average total costs lower than competitors. This can create significant abnormal profit and can create barriers through:

Oligopolies are interdependant as the success of their price strategy relies on the reaction of other oligopoly firms in the market. If an oligopoly decided to increase the price of it's output, they w...