15–22% of the AP exam. Key topics: Monopoly: downward-sloping demand curve, MR below demand, Monopoly profit maximization: MR = MC → find Q, then go up to demand for P, Monopoly economic profit, consumer surplus loss, and deadweight loss, Natural monopoly: ATC still falling; socially optimal vs. fair-return (average-cost) pricing, Price discrimination: first-degree (perfect), second-degree (quantity discounts), third-degree (market segmentation), Monopolistic competition: short-run profit or loss, long-run zero economic profit, Monopolistic competition: excess capacity and product differentiation, Oligopoly: mutual interdependence and strategic behavior, Collusion, cartels, and incentives to cheat, Game theory: payoff matrices, dominant strategy, Nash equilibrium, Prisoners' dilemma and its implications for oligopoly behavior.
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