Consumers, Producers, and the Efficiency of
... triangle ABC. When the price rises from P1 to P2, as in panel (b), the quantity supplied rises from Q1 to Q2, and the producer surplus rises to the area of the triangle ADF. The increase in producer surplus (area BCFD) occurs in part because existing producers now receive more(area BCED) and ...
... triangle ABC. When the price rises from P1 to P2, as in panel (b), the quantity supplied rises from Q1 to Q2, and the producer surplus rises to the area of the triangle ADF. The increase in producer surplus (area BCFD) occurs in part because existing producers now receive more(area BCED) and ...
Price Discrimination
... Under perfect competition, the price and quantity are determined by supply and demand. A monopolist reduces the quantity supplied to QM, raising the price to PM. ...
... Under perfect competition, the price and quantity are determined by supply and demand. A monopolist reduces the quantity supplied to QM, raising the price to PM. ...
chap008Answers
... Assume that a pure monopolist and a purely competitive firm have the same unit costs. Contrast the two with respect to (a) price, (b) output, (c) profits, (d) allocation of resources, and (e) impact upon the distribution of income. Since both monopolists and competitive firms follow the MC = MR rule ...
... Assume that a pure monopolist and a purely competitive firm have the same unit costs. Contrast the two with respect to (a) price, (b) output, (c) profits, (d) allocation of resources, and (e) impact upon the distribution of income. Since both monopolists and competitive firms follow the MC = MR rule ...
Revision_on_Changes_in_Costs.pdf
... At A2 level you are expected to be able to use analysis diagrams to show the effects of changes in short and long run production costs on a firm’s prices, profits and output. Changes in fixed costs Costs Profit after rise in fixed costs ...
... At A2 level you are expected to be able to use analysis diagrams to show the effects of changes in short and long run production costs on a firm’s prices, profits and output. Changes in fixed costs Costs Profit after rise in fixed costs ...
Describing Supply and Demand: Elasticities
... demand perfectly inelastic. • Perfectly inelastic demand is a vertical line in which quantity does not change at all in response to a change in price (D = 0). ...
... demand perfectly inelastic. • Perfectly inelastic demand is a vertical line in which quantity does not change at all in response to a change in price (D = 0). ...
5 LABOR MARKETS
... good. Economists claim that the markets for labor can also be described using a model of supply and demand. In particular, the equilibrium wage rate, which is the price of labor services, is determined in a labor market. But there are important differences between the markets for goods, such as spag ...
... good. Economists claim that the markets for labor can also be described using a model of supply and demand. In particular, the equilibrium wage rate, which is the price of labor services, is determined in a labor market. But there are important differences between the markets for goods, such as spag ...
Lec 32
... • Are prices high because rents are high, or are rents high because prices are high? • What is capital? • How is the interest rate determined? • The net productivity of capital • The capitalization of assets • The present value of future income • How are profits determined? • Theories of profit ...
... • Are prices high because rents are high, or are rents high because prices are high? • What is capital? • How is the interest rate determined? • The net productivity of capital • The capitalization of assets • The present value of future income • How are profits determined? • Theories of profit ...
lecture2_2008old
... Profit is any income to a proprietor—Marxist Labor View—which is fallacious The economist is interested in the dynamic forces of production while: The accountant is interested in proprietorship….cost as a deduction from the owner’s income Economic profit is the unimputable income i.e. “the res ...
... Profit is any income to a proprietor—Marxist Labor View—which is fallacious The economist is interested in the dynamic forces of production while: The accountant is interested in proprietorship….cost as a deduction from the owner’s income Economic profit is the unimputable income i.e. “the res ...
Pareto Efficiency
... antitrust cases, often use the concept of crossprice elasticity of demand to measure whether a firm has monopoly power in supplying a good or service in the given market • The cross-price elasticity of demand measures the degree to which the quantity demanded of a good X is related to the price of a ...
... antitrust cases, often use the concept of crossprice elasticity of demand to measure whether a firm has monopoly power in supplying a good or service in the given market • The cross-price elasticity of demand measures the degree to which the quantity demanded of a good X is related to the price of a ...
Test Questions - October 26, 2007 - Version A
... want to work less in order to take more vacations and more leisure time). Such a supply curve is represented at the right, where w is the wage rate per hour and L is the number of hours of labour. The demand curve for labour (representing the number of hours of labour demanded by firms which hire th ...
... want to work less in order to take more vacations and more leisure time). Such a supply curve is represented at the right, where w is the wage rate per hour and L is the number of hours of labour. The demand curve for labour (representing the number of hours of labour demanded by firms which hire th ...
lecture notes
... invest in enough fixed plant to handle peak loads. Much of this fixed plant goes unused most of the time, and a price = marginal cost would be below average total cost. Regulators often choose a price equal to average cost rather than marginal cost, so that the monopoly firm can achieve a “fair retu ...
... invest in enough fixed plant to handle peak loads. Much of this fixed plant goes unused most of the time, and a price = marginal cost would be below average total cost. Regulators often choose a price equal to average cost rather than marginal cost, so that the monopoly firm can achieve a “fair retu ...
Test 2
... 40. Define Minimum Wage, show and discuss its relationship with Unemployment. 41. Define Rent Control, identify between short-run and long-run Rent Control. 42. Discuss and explain the term Equilibrium without Trade. 43. Discuss and explain the term World Price and Comparative Advantage. 44. Discuss ...
... 40. Define Minimum Wage, show and discuss its relationship with Unemployment. 41. Define Rent Control, identify between short-run and long-run Rent Control. 42. Discuss and explain the term Equilibrium without Trade. 43. Discuss and explain the term World Price and Comparative Advantage. 44. Discuss ...
Demand, Supply, and Market Equilibrium
... Demand in Product/Output Markets Changes in Quantity Demanded versus Changes in Demand Price and Quantity Demanded: The Law of Demand Other Determinants of Household Demand Shift of Demand versus Movement Along the Demand Curve From Household Demand to Market Demand Supply in Product/Output Markets ...
... Demand in Product/Output Markets Changes in Quantity Demanded versus Changes in Demand Price and Quantity Demanded: The Law of Demand Other Determinants of Household Demand Shift of Demand versus Movement Along the Demand Curve From Household Demand to Market Demand Supply in Product/Output Markets ...
Chapter 24 Perfect Competition Exam V2
... The demand curve of the perfectly competitive industry is horizontal as are the demand curves facing the individual firms. B) The market demand curve of perfect competition is horizontal because the individual consumers are buying a homogeneous product. C) The market demand curve of the perfectly co ...
... The demand curve of the perfectly competitive industry is horizontal as are the demand curves facing the individual firms. B) The market demand curve of perfect competition is horizontal because the individual consumers are buying a homogeneous product. C) The market demand curve of the perfectly co ...
Chapter 5
... Income is one of the determinants of demand "Free goods" have more takers in lower income neighborhoods than in higher income areas The wait to get the free good is the price Waiting times in lower income areas will be longer Lower opportunity cost of the residents' time Stores in higher ...
... Income is one of the determinants of demand "Free goods" have more takers in lower income neighborhoods than in higher income areas The wait to get the free good is the price Waiting times in lower income areas will be longer Lower opportunity cost of the residents' time Stores in higher ...
Major Themes in International Economics + Review of
... F Major themes in International Economics F Review of microeconomic concepts ...
... F Major themes in International Economics F Review of microeconomic concepts ...
Supply and demand
In microeconomics, supply and demand is an economic model of price determination in a market. It concludes that in a competitive market, the unit price for a particular good, or other traded item such as labor or liquid financial assets, will vary until it settles at a point where the quantity demanded (at the current price) will equal the quantity supplied (at the current price), resulting in an economic equilibrium for price and quantity transacted.The four basic laws of supply and demand are: If demand increases (demand curve shifts to the right) and supply remains unchanged, a shortage occurs, leading to a higher equilibrium price. If demand decreases (demand curve shifts to the left) and supply remains unchanged, a surplus occurs, leading to a lower equilibrium price. If demand remains unchanged and supply increases (supply curve shifts to the right), a surplus occurs, leading to a lower equilibrium price. If demand remains unchanged and supply decreases (supply curve shifts to the left), a shortage occurs, leading to a higher equilibrium price.↑