For instructors

Each tool follows the same layout. It asks a question, offers a few controls with presets, and shows one main chart, number tiles, and a verdict. A Questions tab asks students to predict before they reveal the answer, and a Math tab gives the formulas and sources.

Using a tool in class

  1. Open the tool before the session, because the first load downloads the R runtime into the browser.
  2. Start from the default preset.
  3. Ask the room to predict the effect of one change, then move the slider.

Monopoly and welfare

Tab Concept Teaching point
1 Monopoly and deadweight loss Monopoly pricing and deadweight loss The monopolist cuts output. Part of the lost consumer surplus is a transfer, and the rest is lost to everyone.
2 Rent seeking Rent seeking and the social cost of monopoly If firms spend resources to win the monopoly, the social cost is the triangle plus part of the rents.

How many firms?

Tab Concept Teaching point
1 The trade-off Cournot competition with a fixed cost More firms lower the price, but each one duplicates the fixed cost. Consumers and society can prefer different numbers of firms.
2 Fixed costs and market structure Fixed costs and the optimal number of firms High fixed costs support few firms, and free entry can bring more firms than welfare calls for.
3 Price competition Price competition with differentiated products How firms compete after entry decides how many enter. Soft competition attracts too many firms, and tough competition can leave too few.

Market definition

Tab Concept Teaching point
1 Is a price increase profitable? Critical loss, with the loss predicted from the own-price elasticity or from the diversion ratio High margins lower the critical loss, and margins and elasticities must fit together.
2 SSNIP step by step The SSNIP test in Nestlé/Perrier and Whole Foods/Wild Oats Widen the candidate market until the price increase is profitable.
3 Cellophane fallacy The cellophane fallacy At the monopoly price the test always fails, so start from a competitive price.

Concentration and market power

Tab Concept Teaching point
1 Shares and markups The Lerner index in Cournot competition In Cournot, L = s/|η|, so the same shares mean less market power when demand is more elastic.
2 HHI and the merger screen HHI, CR4, and the legal thresholds Compute the HHI and its change, and compare the US presumption with the EU safe harbor (Heinz/Beech-Nut).
3 Is concentration market power? Concentration and conduct The same HHI gives zero (Bertrand), Cournot, or monopoly markups.
4 Diversion and GUPPI Diversion ratios and pricing pressure HHI and GUPPI can disagree in both directions. Measure diversion where the competition takes place.

Technical notes

The tools are R Shiny apps compiled with shinylive and run in the browser through WebAssembly (webR). The source code is in the site’s GitHub repository.