The field of Industrial Organization studies the behaviors of firms in imperfectly competitive markets. Its importance is best illustrated by understanding limitations of perfect competition. By definition, a perfectly competitive firm takes the market determined price as given and therefore has absolutely not control on price. Consequently, there is no room for any pricing strategy, not room for advertisement, and the firm has little incentive to conduct R&D or merge with other firms. All these business practices that we see every day must be discussed and analyzed in a setting of imperfect competition - the main focus of Industrial Organization.
Pre-Req: ECON.2010 Principles of Microeconomics