the quantity produced at the bottom of the long-run average cost curve (5,000, 10,000 or 20,000). In such a

situation, the market is set for competition between many firms. However, what if the bottom of the long-run

average cost curve is at a quantity of 10,000 and the total market demand at that price is only slightly higher

than that quantity—or even somewhat lower?

Return to Figure 7.11 (a), where the bottom of the long-run average cost curve is at 10,000, but now imagine

that the total quantity of dishwashers demanded in the market at that price of $500 is only 30,000. In this

situation, the total number of firms in the market would be three. We call a handful of firms in a market an

“oligopoly,” and the chapter on Monopolistic Competition and Oligopoly will discuss the range of competitive

strategies that can occur when oligopolies compete.

Alternatively, consider a situation, again in the setting of Figure 7.11 (a), where the bottom of the long-run
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