Overview I. Perfectly Competition Characteristics and profit outlook Effect of new entrants II. Monopolies a Sources of monopoly power Maximizing monopoly profits Pros and cons III Monopolistic Competition Profit maximization ■ Long run equilibrium Michael R Baye, Managerial Economics and Business Strategy, 3e. CThe McGraw-Hill Companies, Inc, 1999Michael R. Baye, Managerial Economics and Business Strategy, 3e. ©The McGraw-Hill Companies, Inc. , 1999 Overview I. Perfectly Competition  Characteristics and profit outlook  Effect of new entrants II. Monopolies  Sources of monopoly power.  Maximizing monopoly profits.  Pros and cons III. Monopolistic Competition  Profit maximization  Long run equilibrium