This course opens by introducing you to externalities, which are a form of market failure that fall on bystanders. You will look into the types of costs as well as the Pigouvian tax, which is a tax on goods with an external cost. You will learn how firms maximize profits and that in a competitive market, a firm has no control over its price because the market determines the price.

You will then learn the properties of ‘the invisible hand’ of the market as well as the elimination principle on profits, including their implications. You will look into monopolies and learn how monopolists have market power. You will also delve into the low elasticity of demand as well as patents. The material will teach you why patents can be particularly important in industries such as pharmaceuticals.

Having an in-depth understanding of competition in the marketplace can help every business entrepreneur or manager devise a strategy that will benefit their organization as well as satisfy their customers' needs and wants. This course is the third in a series of four courses on microeconomics, so if you have finished ‘Microeconomics: Supply, Demand and Equilibrium’ as well as ‘Microeconomics: Price and Trade’, take this course now and continue learning about microeconomics.