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AP® Microeconomics · Unit 4 · Topic 4.1

Introduction to Imperfectly Competitive Markets: Topic Checklist (Microeconomics 4.1)

Specific “I can…” statements for imperfectly competitive markets, each linked to the guide section and practice question that shows whether you can really do it.

Work through the list without notes. If you cannot do a statement, follow its link, then come back. Guide = study guide; Practice = practice questions.

Understanding

  • I can name the three imperfectly competitive product-market structures and the factor-market one (monopsony). (Guide: “The four market structures”; Practice Q1)
  • I can compare the four market structures by number of sellers, type of product, barriers to entry, demand facing the firm and long-run profit. (Guide: table in “The four market structures”)
  • I can name and give an example of three barriers to entry: high start-up costs, legal barriers and exclusive ownership of a key resource. (Guide: “Barriers to entry”; Worked example 3; Practice Q5)
  • I can state one similarity between all four models and one limitation of using them for real markets. (Guide: “Similarities, differences and limits of the models”; Practice Q7)

Calculation and graphing

  • I can calculate total revenue and marginal revenue from a demand schedule. (Guide: Worked example 1; Practice Q4)
  • I can split marginal revenue into a quantity effect and a price effect. (Guide: Figure 2; Practice Q4)
  • I can find where total revenue is largest and say whether demand is elastic or inelastic on each side of it. (Guide: Worked example 1(c); Practice Q4)
  • I can draw demand and MR for a price taker (one horizontal line) and for an imperfectly competitive firm (MR below demand, same price intercept). (Guide: Figure 1; Practice Q6)

Reasoning

  • I can explain why a firm with a downward-sloping demand curve has MR below price. (Guide: “Why a firm must cut its price to sell more”; Practice Q2)
  • I can explain why P > MC at the chosen output means too little is produced, and why the firm still will not produce more. (Guide: Worked example 2; Practice Q3, Q7)
  • I can tell P > MC (an efficiency idea) apart from P > ATC (a profit idea). (Guide: “Common misconceptions”; Practice Q3)
  • I can explain how barriers to entry let economic profit last in the long run. (Practice Q5)

All ticked? Move on to Topic 4.2, Monopoly, or return to the course roadmap.

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