Firm Level Economics: Markets and Allocations

Instructor: Larry DeBrock

Intermediate Level • 2 weeks at 10 hours a week • Flexible Schedule

What You'll Learn

  • Explain how different market structures result in different resource allocations.
  • Model the impact of external shocks to a particular market structure and demonstrate the new equilibrium price and quantity.
  • Explain when and why the government might intervene with regulatory authority or antitrust litigation to lessen inefficiencies in some markets.
  • Describe how information problems can cause inefficient outcomes.

Skills You'll Gain

Supply And Demand
Market Analysis
Resource Allocation
Business Economics
Economics
Competitive Analysis
Game Theory
Decision Making
Market Dynamics
Public Policies

Shareable Certificate

Earn a shareable certificate to add to your LinkedIn profile

Outcomes

  • Learn new concepts from industry experts
  • Gain a foundational understanding of a subject or tool
  • Develop job-relevant skills with hands-on projects
  • Earn a shareable career certificate

There are 5 modules in this course

You will become familiar with the course, your classmates, and our learning environment. The orientation will also help you obtain the technical skills required for the course.

This module introduces the concept of a perfectly competitive market. It is a benchmark construction, but it accurately models many markets in our economy. We will understand equilibrium outcomes in both the short run and the long run. We will understand how to analyze shocks to these equilibria.

Analysts can predict equilibrium outcomes with some degree of certainty. We want to construct a measure of efficiency that will allow us to evaluate the attractiveness of these equilibrium market outcomes. After using this metric to consider the efficiency of the competitive market, we will introduce a different market structure, monopoly, and use our efficiency metric to evaluate the equilibrium resource allocation under monopoly.

Perfectly competitive markets have many sellers. Monopoly has one seller. But much economic activity takes place in markets with just a handful of very large producers. These are called oligopoly markets. We will look at collusive arrangements among a small number of rivals, and then will use simple game theoretic techniques to model equilibrium.

Sometimes even markets that appear to be capable of great efficiency in resource allocation, such as the perfectly competitive market, can fall short of efficiency. Economists call this market failure. In this module, we will consider information issues and the impact on efficiency. We will also introduce externalities (spillovers) such as pollution and model these impacts.