The Theory of Industrial Organization

The Theory of Industrial Organization studies how companies operate within markets, focusing on how they compete, set prices, and make strategic decisions. It examines market structures—such as perfect competition, monopolies, and oligopolies—and how these influence pricing, product choices, and innovation. The theory helps explain how firms interact, react to competitors, and respond to government policies, ultimately shaping the competitive landscape and consumer experience. It uses economic principles to analyze how markets function and to identify ways to promote efficiency and fair competition.