Three weeks ago, we added a simulation about monopoly pricing, marginal and sunk costs and price-elasticity of demand on our site.

The player is a monopoly on a given market, and must decide how many goods to produce and what price to set. Marginal and fixed costs change from one round to the other. In round 5, demand gets less elastic.

 

 

We also added a second simulation about perfect competition.

 

 

The player manages a small firm that competes with many other on a market. From consumers’ perspective, products of all firms are identical. Consumers are also informed about each firm’s price and there are no transportation costs: Consequently, they buy to the firms with the lowest price. The player knows that its competitors’ prices are stable and equal to $180k per unit and must decide what price to set and how much to produce. In round 3, the fixed production cost increases and the player must decide how to react to that.

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