Microeconomics Master Index Lectures (Term 1)

23 May, 2026

Microeconomics: A Working Knowledge System (Sessions 11–15)

This is a living reference built from lecture slides, Pindyck & Rubinfeld (2017), and solved problems across Sessions 11–15 of an MBA Managerial Economics course. Each section below links to a dedicated post. Start here, navigate from here, return here.

What This Covers

Five sessions. Four market structures. One underlying question:

How does a firm's competitive environment shape its pricing power, output decisions, and long-run survival?

The sessions move from foundational mechanics (cost curves, profit maximisation) through progressively complex market structures — perfect competition, monopoly, monopsony, monopolistic competition, and oligopoly. By the end, you should be able to look at any real industry and reason systematically about pricing, entry, welfare, and strategy.

The Big Picture: How It All Connects

Cost Structure → Profit Maximisation Conditions
                        ↓
          MR = MC  (universal rule, different implications)
                        ↓
    ┌───────────────────────────────────────┐
    │         Market Structure              │
    ├───────────────┬───────────────────────┤
    │  Price Takers │   Price Makers        │
    │               │                       │
    │  Perfect      │  Monopoly             │
    │  Competition  │  Monopsony            │
    │               │  Monopolistic Comp.   │
    │               │  Oligopoly            │
    └───────────────┴───────────────────────┘
                        ↓
         Welfare Effects + Strategic Implications

One principle runs through all of it: the gap between price and marginal cost is the measure of market power. Everything else is an explanation of where that gap comes from and what it costs society.

Session Map

Chapter Map

Concept Index

Profit Maximisation

• MR = MC rule — the universal condition → Ch. 8
• Total, marginal, and average revenue — Ch. 8
• Short-run vs long-run cost distinctions → Session 11
• Envelope theorem → Session 11

Perfect Competition

• Price-taking behaviour and firm demand curve → Session 12
• Shutdown condition (P < AVC) → Session 12
• Producer surplus and welfare → Session 12
• Long-run equilibrium and zero profit → Session 12
• Industry supply curve derivation → Ch. 8

Monopoly

• Why MR < P for a price-maker → Session 13
• Deadweight loss and welfare cost → Session 13
• Lerner Index — measuring market power → Session 13, Ch. 10
• Natural monopoly → Ch. 10
• Elasticity and the markup rule → Ch. 10

Price Discrimination

• First-degree: full surplus extraction → Ch. 11
• Second-degree: block pricing and self-selection → Ch. 11
• Third-degree: market segmentation → Ch. 11
• Arbitrage constraints → Ch. 11

Monopsony

• Buyer market power and marginal expenditure → Session 14
• Markdown pricing → Session 14, Ch. 10
• Welfare effects of monopsony → Ch. 10
• Bilateral monopoly → Session 14

Monopolistic Competition

• Product differentiation and downward-sloping demand → Session 14
• Long-run zero profit (but not zero markup) → Session 14
• Excess capacity theorem → Ch. 12

Oligopoly

• Strategic interdependence — why it changes everything → Session 15
• Reaction functions — the core tool → Session 15
• Cournot quantity competition → Session 15, Ch. 12
• Stackelberg leader-follower model → Session 15, Ch. 12
• Bertrand price competition → Session 15, Ch. 12
• Kinked demand curve — price rigidity → Session 15
• Cartels and price leadership → Session 15, Ch. 12

Formula Index

Quick lookup. Full derivations and interpretations are in each chapter post.

Graph Index

Every major graph in the course. Know these cold.

Solved Questions Index

All assigned review questions and exercises, fully worked through with economic reasoning.

Revision System

How to Use This System

If you're studying a topic for the first time: Start with the Session post → read the Chapter post → do the Solved Questions.

If you're revising before an exam: Start with the Concept Cheatsheet → check the Formula Guide → run through Solved Questions for the relevant chapter.

If you're stuck on a specific concept: Use the Concept Index above to find the exact post and section.

If you're doing a past paper: Go directly to Solved: Quiz 2 — it reverse-engineers what the professor tests and why.

A Note on How These Posts Are Written

Each post in this system is built from three sources in order of priority:

1. Lecture slides (professor's framing comes first)
2. Pindyck & Rubinfeld, Microeconomics, Global Edition (2017)
3. PYQ patterns (what actually gets tested)

Where the textbook and lecture differ, the lecture framing is used and the textbook depth is added separately. The goal throughout is not to summarise — it's to explain the intuition behind every result, every graph, and every formula.

Posts are added as they are completed. Check back for updates.

Textbook reference: Robert S. Pindyck & Daniel L. Rubinfeld, Microeconomics, Global Edition, Pearson, 2017.