8.1.4 Methodology
For each type of market structure the necessary conditions for its existence are first
explained. A static, partial equilibrium analysis then follows, usually assuming
certainty or perfect information. This analysis is initially graphical, following the
lines of introductory microeconomics texts with which the student may be familiar.
The analysis then moves on to an algebraic approach involving optimization
techniques. A knowledge of basic calculus is assumed at this point. Some of the
limitations of these methods are then discussed, but the implications of these
limitations are not developed until Chapter 9, when strategic behavior in a
dynamic environment under conditions of uncertainty is examined in more detail.