Week 12 · Readings & resources

Week 12 — Readings & Resources

Principles of Microeconomics Free sample edition

Your primary reading is Chapter 12 (in this module). Everything below is the optional, go-deeper layer — pick what helps, skip the rest.

How to use this page

This page has 10 items (4 readings and 6 videos). Allow 46–54 minutes for everything. Each group points back to the matching chapter section and class-session segment, so use the full menu when you want more, or take the quick path below.

Every video here has captions: turn them on with the CC button in the player. The chapter covers the same ideas in text.

Pick-one quick path (18–20 min total)

① Many sellers, each a little different

Chapter 12, Section “Meet monopolistic competition” · Session 1, Segment 1, “Differentiated products and free entry” · Remember: many shops that each differ a little get a small slice of pricing power, and the open door takes their economic profit away in the long run.

Monopolistic Competition: Economics Explained — Federal Reserve Bank of St. Louis — a four-minute tour of three pizza places that sell similar but not identical pizzas, placed between perfect competition and monopoly. It explains why each seller tries to build a narrow mini-monopoly through style, location, speed, and advertising, and why the threat of new rivals keeps its pricing power small. This builds on Week 11's work with a seller whose demand curve slopes down. (video, 4 min) (captions: creator)
Monopolistic Competition: A Review of the Market Structure — Economics in Many Lessons — a seven-minute review that lines up the market structure's traits, then reads one firm's graph: output where marginal revenue meets marginal cost, the price read from demand, and the long-run picture in which entry shifts demand left until price equals average cost and the demand curve touches the cost curve. It also names the trade-off the chapter calls the price of variety. (video, 7 min) (captions: automatic)
Plan your business: Market research and competitive analysis — U.S. Small Business Administration — the agency's guide for new owners on studying rivals and finding what makes a business different. Read the opening section and the part on competitive analysis, which asks owners to weigh competitors' strengths and weaknesses and the barriers to entering a market; that is product differentiation from the seller's side of the counter. Skip the business-plan and credit sections below it. (reading, 4–6 min)

② A few rivals, and the temptation to collude

Chapter 12, Section “See why rivals are tempted to collude” · Session 1, Segment 3, “Oligopoly, collusion, and cartels” · Remember: a few rivals who watch each other can gain together by fixing prices, but each one gains even more by cheating, and the agreement is illegal.

Introduction to Oligopoly: Economics Explained — Federal Reserve Bank of St. Louis — a six-minute explainer on markets where a few large sellers dominate, why high start-up costs keep the number small, and why each seller must weigh its rivals' choices. Its last section shows why a price-fixing agreement unravels when any one seller can win customers by cutting its price. It opens with a sports-betting scandal as a story about collusion; you can skip ahead to the market-structure section. Use this example while completing the Week-12 module overview. (video, 6 min) (captions: creator)
Price Fixing — Federal Trade Commission — the agency's plain-language page on agreements among competitors to set prices or limit output. Read the opening paragraphs and the short questions at the end, which explain why rivals' prices can move together for innocent reasons and why matching a rival's price is not illegal unless it rests on an agreement. (reading, 4–6 min)
The Antitrust Laws — U.S. Department of Justice, Antitrust Division — the agency's overview of the federal competition laws it enforces. Read the first two paragraphs, on agreements among competitors to fix prices, rig bids, or divide customers; the rest of the page covers mergers and other conduct that this week does not take up. It states what the law forbids, not how hard it should be enforced, which is a separate debate. (reading, 3–5 min)

③ Payoff tables, dominant strategies, and the dilemma

Chapter 12, Section “Find each shop's dominant strategy” · Session 2, Segment 4, “Dominant strategies and Nash equilibrium” · Remember: a dominant strategy wins in every column, a Nash equilibrium is where no one gains by switching alone, and the two can leave both players worse off.

Game Theory Explained in One Minute — One Minute Economics — a ninety-second introduction that separates a goal that depends on one person from a situation where each player's result depends on the others, such as chess or companies that respond to a rival's price cut. Watch it first if game theory is new to you. (video, 2 min) (captions: automatic)
Game Theory I: Static Game, Dominant Strategy, Nash Equilibrium — Economics in Many Lessons — an eight-minute walk through a two-firm advertising game, laid out as a two-by-two table with the row firm's payoff first. It finds each firm's dominant strategy by comparing one row or column at a time, tests the outcome for a Nash equilibrium by asking whether either firm would switch alone, and shows why the outcome that pays both more is not an equilibrium, the same steps the chapter takes with the coffee shops. (video, 8 min) (captions: automatic)
The Prisoner's Dilemma Explained in One Minute — One Minute Economics — a ninety-second version of the classic story of two suspects who each do better by testifying, so both end up worse off than if both had stayed quiet. Its closing line notes that people in experiments cooperate more than the model predicts, a useful caution about treating a model as a forecast. (video, 2 min) (captions: automatic)

Optional one-stop reference (free online reference)

Game Theory — Concise Encyclopedia of Economics, Econlib — a signed reference entry on the study of strategy. Read the paragraphs on simultaneous moves, Nash equilibrium, dominant and dominated strategies, and the prisoners' dilemma. Skip the later sections on mixing moves, commitment, and bargaining, which go beyond this course. (reading, 6–8 min)

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