Final Exam – Ch. 13-17
Ch. 13 Costs of Production
Short-run vs Long-run Costs – differences
SR -> Fixed Costs present ->
LR -> all costs variable
LR cost curve envelope of all possible SR cost curves – and least cost
Supply curve = MC curve
Minimum price, or starting pt, for SR and LR cost curves
Economies-of-Scale, Constant Returns to Scale, Diseconomies of Scale
Natural Monopolies (EOS)
Ch. 14 Perfectly Competitive Markets
Basic Assumptions
Nr. Of Buyers/Sellers
Entry (free or barriers?)
Type of product (same or differentiated)
Price-taker or price-searcher
How do they determine what output to produce
Can a PC firm set the price for its product?
Allocative Efficiency, Productive Efficiency, Incentive for Tech Innov – compare to other market types
Ch. 15 Monopoly
Basic Assumptions
Nr. Of Buyers/Sellers
Entry (free or barriers?)
Type of product (same or differentiated)
Price-taker or price-searcher
What’s different about how a monopolist sets price than PC
How do they determine what output to produce
Allocative Efficiency, Productive Efficiency, Incentive for Tech Innov – compare to other market types
Anti-trust Behavior – how do we attempt to regulate Monopolies to improve economic efficiency
Ch. 16 Monopolistic Competition
Basic Assumptions
Nr. Of Buyers/Sellers
Entry (free or barriers?)
Type of product (same or differentiated)
Price-taker or price-searcher
How is a MC firm similar to PC firm? Different from a PC firm?
How is a MC firm similar to M firm? Different from a M firm?
How does a MC firm get market power? Compare their market power to a Monopolist (what
would you use to measure the difference)
How do they determine what output to produce
Allocative Efficiency, Productive Efficiency, Incentive for Tech Innov – compare to other market types
Ch. 17 Oligopoly
Basic Assumptions
Nr. Of Buyers/Sellers
Entry (free or barriers?)
Type of product (same or differentiated)
Price-taker or price-searcher
What would it take for an Oligopoly to behave like a Monopoly?
When would they behave more like a PC market? (Game Theory situation)
What is a cartel? What are the incentives that might break up a cartel?
Under what circumstances would a market outcome (equilibrium) be stable?
Under what circumstances would a market outcome (equilibrium) be unstable?
How do they determine what output to produce
Allocative Efficiency, Productive Efficiency, Incentive for Tech Innov – compare to other market types