ECN 722 Chapter Notes - Chapter 3: Rent-Seeking, Professional Sports, Media Market
14 Mar 2019
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Document Summary
Utility - level of satisfaction or happiness a person is able to achieve. Marginal benefits - value being derived from the decision being made. Marginal cost - charge associated with the decision being made. Opportunity cost - value of the next best alternative cast aside in making a decision. Sunk costs - charges that are not impacted by the decision at hand. Monopoly - a firm that is a sole seller in a market. X-inefficiency - what happens when monopolies do not have a incentive to produce as efficiently as possible because they do not face competition. Elasticity - ratio of the percentage change in a dependent variable to a percentage in an independent variable. Chapter three - profits in professional sports: competitive monopolies. Often only one professional team per city (unless the market is big enough) Businesses would like to become a monopoly by eliminating competition. Anti-trust laws prevent such behaviour in most industries but professional sports are exempt.
