ABSTRACT
In the chapters that follow, we widen the discussion to take account of the influence of other firms on the behaviour of an individual firm, which requires us to examine the behaviour of firms in the context of their market environment. In economics a number of models relating to differing market conditions have been developed. Some of them, in particular those of perfect competition and monopoly, form a major plank of a standard introductory course in economics, and will no doubt be familiar to most readers. We nevertheless start with a review of these basic models in this chapter, since the issues and models discussed in subsequent chapters are essentially elaborations and developments of these traditional theories.
