Law Of Supply
... • A low level of stocks makes supply inelastic in the short term • When stocks can be released onto the market, supply is elastic The time frame allowed • Momentary period (fixed supply) • Short run (inelastic supply) • Long run (elastic supply) Artificial limits on supply • E.g. the impact of paten ...
... • A low level of stocks makes supply inelastic in the short term • When stocks can be released onto the market, supply is elastic The time frame allowed • Momentary period (fixed supply) • Short run (inelastic supply) • Long run (elastic supply) Artificial limits on supply • E.g. the impact of paten ...
Chapter 25 Monopoly Behavior
... Two-Part Tariffs p1 + p2x Q: What is the largest that p1 can be? A: p1 is the “market entrance fee” so the largest it can be is the surplus the buyer gains from entering the market. Set p1 = CS and now ask what should be p2? ...
... Two-Part Tariffs p1 + p2x Q: What is the largest that p1 can be? A: p1 is the “market entrance fee” so the largest it can be is the surplus the buyer gains from entering the market. Set p1 = CS and now ask what should be p2? ...
chapter overview
... extra time on examples of substitute and complementary goods. 3. The concepts introduced in Chapter 3 are extremely important for an understanding of a market system. In later chapters more sophisticated explanations are introduced. Most instructors will want to wait until that point to discuss marg ...
... extra time on examples of substitute and complementary goods. 3. The concepts introduced in Chapter 3 are extremely important for an understanding of a market system. In later chapters more sophisticated explanations are introduced. Most instructors will want to wait until that point to discuss marg ...
Supply - Binus Repository
... Role of Profits and Losses • Profit occurs when a firm’s revenues are greater than their costs. • Firms supplying goods for which consumers are willing to pay more than the opportunity cost of resources used will make a profit. • Firms making a profit will expand and those with a loss will contract ...
... Role of Profits and Losses • Profit occurs when a firm’s revenues are greater than their costs. • Firms supplying goods for which consumers are willing to pay more than the opportunity cost of resources used will make a profit. • Firms making a profit will expand and those with a loss will contract ...
Document
... Cournot equilibrium: a pair of output levels, one for each firm, which are such that after they are choose, neither firm has incentive to change its output level. (Cournot equilibrium is determined by the intersection of the reaction curves) ...
... Cournot equilibrium: a pair of output levels, one for each firm, which are such that after they are choose, neither firm has incentive to change its output level. (Cournot equilibrium is determined by the intersection of the reaction curves) ...
chapter 8
... a) If the income effect is weaker than the substitution effect, the quantity of work hours increases with the wage rate. b) If the income effect is stronger than the substitution effect, then the quantity of work hours could decrease with the wage rate. 4.Historical evidence shows that the average ...
... a) If the income effect is weaker than the substitution effect, the quantity of work hours increases with the wage rate. b) If the income effect is stronger than the substitution effect, then the quantity of work hours could decrease with the wage rate. 4.Historical evidence shows that the average ...
Micro: Demand and Supply VIDEL LECTURE
... producer’s greater cost to supply the good The law of increasing opportunity costs the marginal cost of production increases as output increases Since producers face a higher marginal cost of production, they must receive a higher price for that output in order to be able to increase the quantity ...
... producer’s greater cost to supply the good The law of increasing opportunity costs the marginal cost of production increases as output increases Since producers face a higher marginal cost of production, they must receive a higher price for that output in order to be able to increase the quantity ...
The Industry Supply Curve
... • Since the price of $14 is each firm’s break-even price, an existing producer makes zero profit, earning only opportunity cost of the resource used in production • CMKT = long-run market equilibrium which is when the quantity supplied equals the quantity demanded, given that sufficient time has ela ...
... • Since the price of $14 is each firm’s break-even price, an existing producer makes zero profit, earning only opportunity cost of the resource used in production • CMKT = long-run market equilibrium which is when the quantity supplied equals the quantity demanded, given that sufficient time has ela ...
law of diminishing marginal utility
... Option 3 is correct: to find the market quantity demanded at each price, simply add the individual quantities demanded This should make sense, because consumers face the same set of prices, but have different quantities demanded. This is called “horizontal summation” because we are adding along t ...
... Option 3 is correct: to find the market quantity demanded at each price, simply add the individual quantities demanded This should make sense, because consumers face the same set of prices, but have different quantities demanded. This is called “horizontal summation” because we are adding along t ...
Ch13 Review Ques ons
... 14) A supply curve shows the rela.onship between the price of a product and the quan.ty of the product supplied. In perfect compe..on, the supply curve in the short run is the por.on of the fi ...
... 14) A supply curve shows the rela.onship between the price of a product and the quan.ty of the product supplied. In perfect compe..on, the supply curve in the short run is the por.on of the fi ...
Absolute Advantage
... for the country involved Known as gains from trade Many popular writings on the world economy suggest trade relationships are a win-lose proposition for the countries involved The gains from trade idea, however, tells us that ...
... for the country involved Known as gains from trade Many popular writings on the world economy suggest trade relationships are a win-lose proposition for the countries involved The gains from trade idea, however, tells us that ...
Price elasticity of demand
... Point Elasticity={[Q2-Q1]/Q1}/{[P2-P1]/P1} Case 1: Price rises from 1 to 1.1 % change in qty = (1.44-1.5)/1.5= -4% % change in price = (1.10-1)/1= 10% Elasticity=-4%/10%=-0.4 ...
... Point Elasticity={[Q2-Q1]/Q1}/{[P2-P1]/P1} Case 1: Price rises from 1 to 1.1 % change in qty = (1.44-1.5)/1.5= -4% % change in price = (1.10-1)/1= 10% Elasticity=-4%/10%=-0.4 ...
Chapter 6 SUPPLY AND EQUILIBRIUM
... buyers). The same is true for supply. One of the determinants of supply is the number of sellers of the product. When the number of sellers increases, the supply should increase (shift to the right). When the number of sellers falls, the supply should decrease (shift to the left). So if there are 1, ...
... buyers). The same is true for supply. One of the determinants of supply is the number of sellers of the product. When the number of sellers increases, the supply should increase (shift to the right). When the number of sellers falls, the supply should decrease (shift to the left). So if there are 1, ...
Demand
... • Markets, the institutions that bring together buyers and sellers, are always responding to events, such as bad harvests and changing consumer tastes that affect the prices and quantities of particular goods. • The demand for some goods increases, while the demand for others decreases. • The supply ...
... • Markets, the institutions that bring together buyers and sellers, are always responding to events, such as bad harvests and changing consumer tastes that affect the prices and quantities of particular goods. • The demand for some goods increases, while the demand for others decreases. • The supply ...
Sample - Rennie Resources
... Therefore, it follows that the cost of each additional unit produced (i.e., MC) must increase because more inputs are being used to produce it. So, marginal cost must rise as output increases. Increasing returns to a factor reflect that a firm’s short-run average costs would be falling. The increase ...
... Therefore, it follows that the cost of each additional unit produced (i.e., MC) must increase because more inputs are being used to produce it. So, marginal cost must rise as output increases. Increasing returns to a factor reflect that a firm’s short-run average costs would be falling. The increase ...
Cartels: Deadweight Loss and the Incentive to Cheat
... units with twenty firms each producing 25 units; the competitive price is $12. When the firms form a cartel and agree to set a quota for each firm to produce only 20 units, then the effect is an industry decrease in units produced to 400 units. The decrease in production from each firm will successf ...
... units with twenty firms each producing 25 units; the competitive price is $12. When the firms form a cartel and agree to set a quota for each firm to produce only 20 units, then the effect is an industry decrease in units produced to 400 units. The decrease in production from each firm will successf ...
Economic equilibrium
In economics, economic equilibrium is a state where economic forces such as supply and demand are balanced and in the absence of external influences the (equilibrium) values of economic variables will not change. For example, in the standard text-book model of perfect competition, equilibrium occurs at the point at which quantity demanded and quantity supplied are equal. Market equilibrium in this case refers to a condition where a market price is established through competition such that the amount of goods or services sought by buyers is equal to the amount of goods or services produced by sellers. This price is often called the competitive price or market clearing price and will tend not to change unless demand or supply changes and the quantity is called ""competitive quantity"" or market clearing quantity.