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Quiz 2 Study Guide

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TR / D Q
-
reducing from(
costs
saved
revenue lost
Qzt0Q
Mca )
( MRI
☆
↳
↳
MC
=
STC
can
↑
this
profit
profit
to ↑
way
/ SQ
MC
=
2°°
16
=
-0¥
how
0-10
↑
competitive firm responds to price
P2
at
=
MR > MC
↑ production
y
=/ EXIT
SHUTDOWN
↳
also
F- ✗ IT
p gave
:
If
rev
from Production
<
TC
production
p< ATC
→
enteritis > ATC
1
yen
.
farmland limited
µ
.n-
Area :( P
p
TR
-
TC
Tito >
-
ATC
-
ATC)
( Q)
=P "
""
hremtitaincetp
↑
Want Quinine f- MC
* carve
efficient scale
also at
when MC
cost
→
r
When
→ when
avg total
0
cost
→
a
avg
-
Atc
firm's at
↳ graph
mind →
is
can
divided
among firms
produce any given
,
each
last
pg
efficient scale
-1C one declines as output increases
production
firm
single
-
be
firm
produces
amount at the
less
,
avg
-1C ↑
lowest costs
1
Qof output
competitive firms
price takers
-
-
-
elastic ,
hormonal Dune
price
( also
-
Demand
much to sell
P=
Q
substitutes)
many
how
also can choose
AR
=
MR
output
monopolies
-
Price
down
sloping
monopolies
-
are
cure is bc
sole
it wants to sell
-
Demand
-
+
sold,
constrained by market demand
→
can choose
produce
Q output
more
thus by ↓ Q produced
price of output ↑
awe
0
producers
has to accept a lower price if
Off it
any ptonit
at , but can't
to
choose apt
>
.
Demand and
Marginal
-
Revenue arrestor
a
monopoly
p
how Qsoldattelb
✓ priuofagood
Demand Cavgrevene)
↓
MR
bc
price
-_
avg
revenue
Q water
←
↳ DWL
[
btwn
dpgvesa wedge
howfirmsnevchanggwhenoinaeases
by limit
:
Monopoly 's profit
A-
MC
MP and
profit
profit
( P ATC)×Q
1
-
=
Costs }
[
-
price
-
avg.TO
-_
pwfithnitsold
# units sold
revenue
MC
C
monopdds-gpgg.gr#cw9
F-
atiowpria
arbitrage : buying good
,
for
selling
profit
higher
←
"
•
•
Demand
%
off
MR
O
Q
Qmax
B
monopoly
avg
•
price
-1C
,
mmwgnwmpen.mygymgawmwggma.ypaaym.ua
Competitive firm
monopoly
firm
:
,
,zg
ggemang
:p=MR=MC
P > Mr :-c
maximizing
MC
pt
^
output,MC4MR
increasing production by / unit means
level of
at low
-
row
when
profit increases
> add costs
>
reducing production bylmitmeanswstssaued
MCSMR
revenue lost
Mc< MR
by producing
/
↑
-
motfposisto
Ii /
↑
^
Devalue
Value to
to
raisepwfikby Pwd
)
buyers
buyers
'
Q
↑
efficient
Q
Me
DWL
monopoly
price
Price
Monopolist w/ perfect price discrimination
price
q
""
profit
Atc
f
Qsold
MC
p
*, ,
regulated
M'
price
D
0
Q
/
surplus
MÑ☆0•
MM
@
consumes
-
MR
profit
mp%MMM§µr
D
DWL
monopolist
/
pill
efficient QQ
MC
☐
# Of Firms
Qsold
Q
1
firm
many
firms
few
firms
differentiated
products
Type
monopolistic
monopoly
•
-
Tap
water
cable Tv
oligopoly
tennis balls
competition
products
identical
movies
products
perfect
competition
shovels
•
Cigs
of
◦
◦
wheat
milk
pwtit
more units
MC
P
cost
additional
-
less
i.
a) Firm
until
eeofnjfir
}
profit
makes
P > ATC
bc
Me
Price
ATC
1
Price
ATC
profit
minimizes
_ -
Price
•
D
MR
profit
Quantity
a
maximizing
b) firm makes
PLATC
be
losses
LOSSES
-ATC
AK
i
-
price
Demand
MR
Q
loss
minimioingq
The
Long
-
equilibrium
Run
gtangapcdaud.EE
°
MC
ATC
" A"
☐
MR
Pwfir
maximizing
Q
Q
Monopolistically competitive
Firm
MC
Manny
gATC
P
MC
☐
MR
efficient
Fucked
scare
Q
~
excess
¥④
¥}
capacity
↳ produces attelticiertscale
perfectly competitive firm
p
> me
D
MC
•✓ATc
-29-63
F- MR
pink
[ demand
une)
Qpwctrced
efficient scale
=
Q
producing
ATC
here where
,
is minimized
p=M
prisoner 's
-
depends
dilemma
on
cooperation Bonnie
silent
confess
•
Bonnie
confess
Clyde
gets
8 yrs
Clyde
free
Clyde
silent
Bonnie
WYD
84s
Clyde ZOYB
Bonnie
Bonnie
free
Clyde
lxr
' "r
CHIY
unlrentryt
\
long
↓
↓
GDP
consumption
✓
spending
0h :
91s
:
,
by households
NOT
housing
( includes education
runeqinoinanlietoexrtor
enter
I
↓
↓
pinnate
net
govpwiha.es
investment
↳ speeding
on
exports
GG by
local /State /
fedgovs
gov purchases : salary sof army
of
capital goods
that will produce more 94
general
,
teacher
transfer
payments : social security
not counted as
gov purchases
benefits
( notmadeinenlhongeforaamuthypwohadg.IS
( not financial
investments)
+
sum of business capital residential
capital + inventories
BC :
business structures, intellectual
pwpotypwdub
Rt : landlords building , homeowner residue
¥
CHM
CH 14
exit
is
possible
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