Firms and Market Structure - Module 1 – Economics – CFA® Level I 2025 (and 2026)

Details

Description

🌍 Macro? Micro? Trade Theories? Don’t Let Economics Tank Your Score

If exchange rates are making your head spin—or if you’ve read about GDP 10 times and still don’t get it—it’s time to stop doomscrolling and start studying smart.

📎 Battle-Ready Summaries – Clean, high-yield Econ summaries that actually stick in your brain
👉 https://www.finquiz.com/cfa/level-1/summary/

📚 Stanley Notes – Full-on explanations of monetary policy, exchange rates, business cycles—explained like your favorite econ prof
👉 https://www.finquiz.com/cfa/level-1/notes/

🧠 Formula Sheet – All those FX rate conversions, growth models, inflation math… simplified
👉 https://www.finquiz.com/cfa/level-1/formula-sheet/

🎯 Question Bank – Practice questions that test your real Econ understanding—not just definitions
👉 https://www.finquiz.com/cfa/level-1/question-bank/

🕐 Mock Exams – Full-length tests that hit you with global macro vibes and time pressure
👉 https://www.finquiz.com/cfa/level-1/mock-exam/

🧃 Explore All Level 1 Resources
👉 https://www.finquiz.com/cfa/level-1/

🚀 Go Premium – Unlock everything and level up faster than the Fed raises rates
👉 https://www.finquiz.com/cfa/level-1/premium/

0:00 Introduction to CFA Level 1 Market Structures
- Why market structures matter for CFA Level 1
- Overview of demand, supply, and competition

0:07 Demand & Price Elasticity Explained
- How price changes affect quantity demanded
- Elastic vs. inelastic demand
- Real-world examples - coffee sale

1:00 Cross-Price & Income Elasticity
- Substitutes and complements - coffee vs. tea, printers vs. ink
- How changes in income influence demand

2:19 Supply Side Concepts: Labor, Costs & Revenues
- Total, average, and marginal product of labor
- Total cost, variable cost, marginal cost
- Revenue and marginal revenue basics

3:26 Overview of Four Main Market Structures
- Perfect competition, monopolistic competition, oligopoly, and monopoly
- Key differentiators - number of sellers, product differentiation, barriers to entry

3:58 Perfect Competition Basics
- Many sellers, identical products, low barriers to entry
- Price taker model and horizontal demand curve
- Example: Agricultural markets - wheat, corn

4:30 Monopolistic Competition
- Many sellers with differentiated products
- Some pricing power due to branding/advertising
- Restaurant and clothing brand examples

5:03 Oligopoly Fundamentals
- Few dominant firms, interdependent decisions
- High barriers to entry, potential for collusion
- Airline and tech industry case studies

5:28 Monopoly Explained
- Single seller with unique product
- High barriers to entry, significant pricing power
- Utility companies as classic examples

7:00 Profit Maximization in Different Market Structures
- Perfect competition: P = MC
- Monopoly & imperfect competition: MR = MC
- Role of the demand curve in setting prices

9:08 Break-Even & Shutdown Points
- When total revenue equals total cost - zero economic profit
- Shutdown rule - price vs. average variable cost
- Short-run vs. long-run decisions

11:07 Economies & Diseconomies of Scale
- Lower average cost with increased production vs. rising costs due to complexity
- Finding the optimal size for efficiency
- Real-world expansion examples

16:00 Short Run vs. Long Run Adjustments
- Fixed inputs - short run vs. all variable inputs - long run
- How firms adapt production capacity over time

17:02 Perfect Competition: Detailed Insights
- Many buyers/sellers, homogeneous products, free entry and exit
- Long-run equilibrium - zero economic profit
- Farmer example - wheat market

19:20 Monopoly: Detailed Insights
- Single seller, unique product, barriers like patents/regulations
- Profit maximization where MR = MC
- Government regulation concerns

21:00 Monopolistic Competition: More In-Depth
- Product differentiation, advertising, brand loyalty
- Short-run profits vs. long-run zero economic profit
- Excess capacity and inefficiency

24:05 Oligopoly: Game Theory & Strategic Behavior
- Interdependent firms - airlines, telecom
- Cournot & Stackelberg models
- Kinked demand curve and price rigidity

27:08 Game Theory & Nash Equilibrium
- How firms choose optimal strategies given competitors’ actions
- Why price wars or tacit collusion may occur
- Stability in strategic choices

30:26 Measuring Market Power
- Elasticity analysis - demand responsiveness
- Cross-sectional regression - snapshot of different firms
- Limitations of regression and data availability

33:04 Concentration Ratios & the Herfindahl-Hirschman Index - HHI
- How to quantify market concentration
- High HHI = few dominant players - e.g., wireless telecom
- Policy and regulatory implications

35:03 Conclusion & CFA Exam Tips
- Recap of key takeaways for Market Structures
- Importance of practice questions in the CFA curriculum
- Final motivation to keep studying