Chapter Outline

Headline: McDonald’s Adds New Tastes and Products to Menu Boards

1. Introduction
2. Perfect Competition
   1. Demand at the Market and the Firm
   2. Short-Run Output Decisions
      1. Maximizing Profits
      2. Minimizing Losses
         1. Short-Run Operating Losses
         2. The Decision to Shut Down
         3. The Short-Run Firm and Industry Supply Curves
   3. Long-Run Decisions
3. Monopoly
   1. Monopoly Power
   2. Sources of Monopoly Power
      1. Economies of Scale
      2. Economies of Scope
      3. Cost Complementarily
      4. Patents and Other Legal Barriers
   3. Maximizing Profits
      1. Marginal Revenue
      2. The Output Decision
      3. The Absence of a Supply Curve
      4. Multiplant Decisions
   4. Implications of Entry Barriers
4. Monopolistic Competition
   1. Conditions for Monopolistic Competition
   2. Profit Maximization
   3. Long-Run Equilibrium
   4. Implications of Product Differentiation
5. Optimal Advertising Decisions
6. Answering the Headline
7. Summary
8. Key Terms and Concepts
9. Conceptual and Computational Questions
10. Problems and Applications
11. Selected Readings
12. Appendix: The Calculus of Profit Maximization