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Long-Run Costs
Long-Run Costs

6.1 allocation methods and efficiency
6.1 allocation methods and efficiency

HW2 - WordPress.com
HW2 - WordPress.com

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... • Short-run average total cost is at its minimum value where average total cost and marginal cost are equal. Average total cost slope = 0. • If marginal cost is less than average total cost, average total cost is decreasing -- has a negative slope. • If marginal cost is greater than average total co ...
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... the firm is better off shutting down, because P < AVC. Panel (b) shows the firm’s supply curve, which is the same as its MC curve for all prices above the shutdown price of $2 per bushel. © 2013 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, ex ...
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... the first model is the case in which a group of companies believe they can influence market prices and coordinate their decisions so as to obtain monopoly profits. Since their coordinated plan requires achieving a certain level of profit for all firms, the plan will establish how the expected monopo ...
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Perfect competition

In economic theory, perfect competition (sometimes called pure competition) describes markets such that no participants are large enough to have the market power to set the price of a homogeneous product. Because the conditions for perfect competition are strict, there are few if any perfectly competitive markets. Still, buyers and sellers in some auction-type markets, say for commodities or some financial assets, may approximate the concept. As a Pareto efficient allocation of economic resources, perfect competition serves as a natural benchmark against which to contrast other market structures.
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