Class 5 PPT
... Increasing Q has two effects on revenue: Output effect: higher output raises revenue Price effect: lower price reduces revenue To sell a larger Q, the monopolist must reduce the price on all the units it sells. ...
... Increasing Q has two effects on revenue: Output effect: higher output raises revenue Price effect: lower price reduces revenue To sell a larger Q, the monopolist must reduce the price on all the units it sells. ...
Market Equilibrium
... he really wants to raise dragons instead. For Harry and Severus, the opportunity cost of teaching a yoga lesson is $50; for Letitia, $25; for Ron, $20; and for Hermione, $0 (remember: she can go back in time and so live the class time twice, so teaching yoga doesn’t keep her from doing something els ...
... he really wants to raise dragons instead. For Harry and Severus, the opportunity cost of teaching a yoga lesson is $50; for Letitia, $25; for Ron, $20; and for Hermione, $0 (remember: she can go back in time and so live the class time twice, so teaching yoga doesn’t keep her from doing something els ...
Module 11
... production agreements. By raising their own production, they can capture some of the profits from the higher prices. This behavior, however, can cause the collapse of the cartel. 3. Price elasticity of demand facing each individual member is higher than for the cartel, because an increase in individ ...
... production agreements. By raising their own production, they can capture some of the profits from the higher prices. This behavior, however, can cause the collapse of the cartel. 3. Price elasticity of demand facing each individual member is higher than for the cartel, because an increase in individ ...
Chapter 5 Elasticity and Its Applications
... Price elasticity of supply depends on the flexibility of sellers to changes in price. For resources like land of a specific type and location, there is practically no flexibility. For manufactured products, there is greater flexibility. In most markets, the time period over which supply is ...
... Price elasticity of supply depends on the flexibility of sellers to changes in price. For resources like land of a specific type and location, there is practically no flexibility. For manufactured products, there is greater flexibility. In most markets, the time period over which supply is ...
PPT
... market Montana stone since the state’s name is synonymous with ruggedness. • Thirty-five states currently produce stone. • According to the U.S. Geological Survey, production of non-crushed stone increased by 19 percent between 2001 and 2005 with expected continued growth. • Stone imports are also e ...
... market Montana stone since the state’s name is synonymous with ruggedness. • Thirty-five states currently produce stone. • According to the U.S. Geological Survey, production of non-crushed stone increased by 19 percent between 2001 and 2005 with expected continued growth. • Stone imports are also e ...
... We refer to such trade as reciprocal dumping. The welfare effects of such trade are interesting. If firms earn positive profits, the opening of trade will increase welfare if transport costs are low. On the other hand, if transport costs are high, opening trade may actually cause welfare to decline ...
Document
... • If demand is price inelastic, then total expenditure moves in the same direction as price. • If demand is elastic, total spending moves in the opposite direction from price. • If demand is unitary elastic, total expenditure remains the same as price changes. ...
... • If demand is price inelastic, then total expenditure moves in the same direction as price. • If demand is elastic, total spending moves in the opposite direction from price. • If demand is unitary elastic, total expenditure remains the same as price changes. ...
Problem Set 1
... rises, the demand for car travel rises as well. People will switch from taking a plane to driving to vacation destinations. Since car travel is less safe and results in a greater number of accidents and fatalities, this will increase infant fatalities despite the fact that safety advocates are pushi ...
... rises, the demand for car travel rises as well. People will switch from taking a plane to driving to vacation destinations. Since car travel is less safe and results in a greater number of accidents and fatalities, this will increase infant fatalities despite the fact that safety advocates are pushi ...
counter-cyclical
... negative income elasticity, they are counter-cyclical, and trend in the opposite direction of the economy. Consumer demand for counter-cyclical products will increase if income falls, just as it will decrease when income rises. Counter-cyclical products are not necessarily 'inferior' goods. (e.g. Sa ...
... negative income elasticity, they are counter-cyclical, and trend in the opposite direction of the economy. Consumer demand for counter-cyclical products will increase if income falls, just as it will decrease when income rises. Counter-cyclical products are not necessarily 'inferior' goods. (e.g. Sa ...
Midterm II with Answers
... CS when the banana market was closed to trade was equal to (1/2)($20/unit of bananas - $5/unit of bananas)(30 units of bananas) = $225. CS when the banana market is open to trade is equal to (1/2)($20/unit of bananas - $8/unit of bananas)(24 units of bananas) = $144. The loss is consumer surplus whe ...
... CS when the banana market was closed to trade was equal to (1/2)($20/unit of bananas - $5/unit of bananas)(30 units of bananas) = $225. CS when the banana market is open to trade is equal to (1/2)($20/unit of bananas - $8/unit of bananas)(24 units of bananas) = $144. The loss is consumer surplus whe ...
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.