The Theory of Imperfect Competition Monopolistic Competition Oligopoly Internal economies generate an oligopoly market structure There are several firms, each of which is large enough to affect prices, but none with an uncontested monopoly Strategic interactions among oligopolists have become Important Each firm decides its own actions, taking into account how that decision might influence its rivals actions Copyright C 2003 Pearson Education, Inc Slide 6-15Copyright © 2003 Pearson Education, Inc. Slide 6-15 ▪ Monopolistic Competition • Oligopoly – Internal economies generate an oligopoly market structure. – There are several firms, each of which is large enough to affect prices, but none with an uncontested monopoly. – Strategic interactions among oligopolists have become important. – Each firm decides its own actions, taking into account how that decision might influence its rival’s actions. The Theory of Imperfect Competition