Managerial Economics Lecture Four Winter 2015
... assume, for competitive markets analysis, fixed cost = sunk cost hence, a business should continue in production so long as its revenue covers variable cost (i.e. shut down if losses are greater than fixed cost) or equivalently, so long as price covers average variable cost. ...
... assume, for competitive markets analysis, fixed cost = sunk cost hence, a business should continue in production so long as its revenue covers variable cost (i.e. shut down if losses are greater than fixed cost) or equivalently, so long as price covers average variable cost. ...
Using Supply and Demand
... If a temporary increase in the demand for housing is expected, rent controls may be effective. This would create a temporary shortage of housing, but it would prevent high prices and a windfall to landlords. ...
... If a temporary increase in the demand for housing is expected, rent controls may be effective. This would create a temporary shortage of housing, but it would prevent high prices and a windfall to landlords. ...
Introduction Learning Objectives
... • Explain the law of supply • Distinguish between changes in supply and changes in quantity supplied • Understand how supply and demand interact to determine equilibrium price and ...
... • Explain the law of supply • Distinguish between changes in supply and changes in quantity supplied • Understand how supply and demand interact to determine equilibrium price and ...
Class 13
... industries, economies of scale make it very difficult for new companies to enter. Because the existing larger companies can produce at a lower cost per unit, a new company that starts with a small number of buyers would not be able to compete on the basis of cost. We call these industries "natural m ...
... industries, economies of scale make it very difficult for new companies to enter. Because the existing larger companies can produce at a lower cost per unit, a new company that starts with a small number of buyers would not be able to compete on the basis of cost. We call these industries "natural m ...
Chapter 8: Profit Maximization and Competitive Supply
... If a patent is profitable, other firms in the industry will pay to use it. The increased value of a patent thus represents an opportunity cost to the firm that holds it. The Opportunity Cost of Land There are other instances in which firms earning positive accounting profit may be earning zero econo ...
... If a patent is profitable, other firms in the industry will pay to use it. The increased value of a patent thus represents an opportunity cost to the firm that holds it. The Opportunity Cost of Land There are other instances in which firms earning positive accounting profit may be earning zero econo ...
Chapter 7 Learning Objectives Monopolistic Competition
... • The demand curve facing a perfect competitor is perfectly elastic. • The demand curve facing a monopolist is the entire market demand curve. • The demand curve facing a firm in a monopolistically competitive industry is somewhere in between the two extremes. Copyright © 2005 Pearson Addison-Wesley ...
... • The demand curve facing a perfect competitor is perfectly elastic. • The demand curve facing a monopolist is the entire market demand curve. • The demand curve facing a firm in a monopolistically competitive industry is somewhere in between the two extremes. Copyright © 2005 Pearson Addison-Wesley ...
CHAPTER OVERVIEW
... monopolist produces where marginal revenue and marginal cost are equal. The monopolist charges the price that consumers will pay for that output level. 3. Allocative efficiency is not achieved because price (what product is worth to consumers) is above marginal cost (opportunity cost of product). Id ...
... monopolist produces where marginal revenue and marginal cost are equal. The monopolist charges the price that consumers will pay for that output level. 3. Allocative efficiency is not achieved because price (what product is worth to consumers) is above marginal cost (opportunity cost of product). Id ...
FOREST ECONOMICS (FWM 302) Definition of Economics
... thus choices must be made about how those resources will be used or allocated. Allocate means distribute. Society must make choices among the alternatives. Society must decide which goods will be produced, how to allocate resources to produce goods, and how to allocate the goods among the population ...
... thus choices must be made about how those resources will be used or allocated. Allocate means distribute. Society must make choices among the alternatives. Society must decide which goods will be produced, how to allocate resources to produce goods, and how to allocate the goods among the population ...
Paper 2
... transacted of oil would increase (from Q1 to Q2). (1 mark) Indicate on the diagram: Increase in demand > Decrease in supply ...
... transacted of oil would increase (from Q1 to Q2). (1 mark) Indicate on the diagram: Increase in demand > Decrease in supply ...
second degree price discrimination
... Charge more for the Type A package than above but still leave the Type A consumer with the same consumer surplus as he would have gotten from consuming the Type B package (because the Type B package is now smaller, this is a smaller amount of consumer surplus than before). As an example, make the Ty ...
... Charge more for the Type A package than above but still leave the Type A consumer with the same consumer surplus as he would have gotten from consuming the Type B package (because the Type B package is now smaller, this is a smaller amount of consumer surplus than before). As an example, make the Ty ...
Bkch4 - University of California, Santa Cruz
... of economic analysis is the response of output to changes in input levels in any given period. What matters is whether the output response, as determined by technology, is less than proportionate, proportionate, or more than proportionate. To explain why this is what matters, we turn to considering ...
... of economic analysis is the response of output to changes in input levels in any given period. What matters is whether the output response, as determined by technology, is less than proportionate, proportionate, or more than proportionate. To explain why this is what matters, we turn to considering ...
Market Structure: Monopoly
... in the long run, as new firms enter the market and push any profitable market price down to long run equilibrium at normal profit. In monopoly, the monopolist can earn positive profits in the long run, because the barriers to entry into the market are so high that it prevents others from entering th ...
... in the long run, as new firms enter the market and push any profitable market price down to long run equilibrium at normal profit. In monopoly, the monopolist can earn positive profits in the long run, because the barriers to entry into the market are so high that it prevents others from entering th ...
or demand
... (a) When two goods are complementary, increased demand for one will cause decreased demand for the other. (b) When two goods are complementary, increased demand for one will cause increased demand for the other. (c) If two goods are substitutes, increased demand for one will cause increased demand f ...
... (a) When two goods are complementary, increased demand for one will cause decreased demand for the other. (b) When two goods are complementary, increased demand for one will cause increased demand for the other. (c) If two goods are substitutes, increased demand for one will cause increased demand f ...
6ech08_rev - Homework Market
... as new firms enter the market, firms must find ways to produce at the lowest possible cost, or at least at cost levels below those of their competitors ...
... as new firms enter the market, firms must find ways to produce at the lowest possible cost, or at least at cost levels below those of their competitors ...
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.