INTRODUCTION
Readers who love to appreciate the fact that in Chinese cuisine and e most difficult cook may weu Once the meats task the preparation ofthe vegetables are properly sliced and all of the spices are everything is thrown into the w ok in a systematic and rashion and usually within a minute or hvo the dish is ready n have been slicing and dicing over chapters and at a sense, we taken you last we are ready to cook We have of the through the economics and managerini economics, the goals elas- firm the definition of types of demand of market force of supply and demand, the various and forecasting ticity price cross price, and income) the estimation and cost) We now demand wn supply(production one of combine and the key factors underlying chapters to address the relevant knowledge from these previous the most important que managerial economics: do firms establish prices and output in objective of profit levels in order to achieve their business maximization? answered within the framework The pricing and output decision will actually be four ba is type of market perfect competition, monopoly, monopolistic competi- tion and oligopoly The distinguishing characteristics of each of the four market types are presented in Figure 91A This chapter deals with pricing and output deci- sions in perfect petition and monopoly The pricing and output decisions of hrms operating in monopolistic competition and oligopoly markets are analyzed in the next chapter Perfect competition and monopoly can be considered the two extreme market environments in which a firm competes in terms of market power. The cons cept of market power was introduced back in Chapter 3. But as a reminder, market 397 Chapter 9 Pricing and output Decisions