Log in
HomeClass Notes1,200,000US530,000

ECON 1011 Lecture Notes - Lecture 15: Taipei Metro, Marginal Revenue, Marginal Cost

55 views3 pages
Verified Note
maroonreindeer65
15 Oct 2018
School
GWU
Department
Economics
Course
ECON 1011
Professor
Steven Suranovic

For unlimited access to Class Notes, a Class+ subscription is required.

ECON 1011 verified notes
15/24View all
14

ECON 1011 Lecture Notes - Lecture 14: Marginal Revenue, Oligopoly, Market Power

15

ECON 1011 Lecture Notes - Lecture 15: Taipei Metro, Marginal Revenue, Marginal Cost

16

ECON 1011 Lecture Notes - Lecture 16: Marginal Cost, Fixed Cost

Document Summary

Each one cannot affect the market price, due to how many firms there are. Each one is an infinitesimal supplier to the marketplace. All firms are identical from firm to firm. Same costs (graph is a representative firm) This is an assumption that reflects a lot less complex setting: a simple setting. All output across all firms are identical. Lecture 13: perfectly competetive markets - part 1. Imagine extending the supply side in order to make perfect competition: Just like there are many sellers of the product. It will have exactly the same features as the particular set of assumptions we"ve been looking at all course. About their products, about cost of production. There is no misinformation, deception, etc. on either the consumer or the producer side. (simplifying assumptions, don"t really reflect reality) In other words, they are trying to maximize their profitability. In the short run, firms will make positive profits.

Get access

Grade+
$40 USD/m
Billed monthly
Grade+
Homework Help
Study Guides
Textbook Solutions
Class Notes
Textbook Notes
Booster Class
10 Verified Answers
Class+
$30 USD/m
Billed monthly
Class+
Homework Help
Study Guides
Textbook Solutions
Class Notes
Textbook Notes
Booster Class
7 Verified Answers

Related Documents

GWU
ECON 1011 Lecture Notes - Lecture 16: Marginal Cost, Fixed Cost
maroonreindeer65
ECON 1011 Lecture Notes - Lecture 11: Perfect Competition, Monopolistic Competition, Network Effect
grayotter832
ECON 1011 Lecture Notes - Lecture 11: Taipei Metro, Economic Surplus, Marginal Revenue Productivity Theory Of Wages
maroonreindeer65

Related Questions

13. One of the limitations of Five Forces is that:

a. These tools reduce producer surplus

b. For one firm to increase profit, it takes it from other participants in the industry

c. Does not provide a firm with sustainable competitve advantage

d. both b & c.

15. All these are characterisctics of a monopoly except,

a. There is one seller of the product

b. Has few substitutes

c. Controls a large share of the market

d. Controls a small share of the market

22. Industries with high barriers to entry

a. Pushes profits to normal returns

b. increases the likelihood of firms entering the industry

c. help firms sustain profits

d. increases the number of competitors

14. How does Ebay differ from an economist's view of a perfect competitve market?

a. Ebay has few buyers whereas perfect competitve industry assumes many buyers

b. Ebay has few sellers whereas perfect competitve industry assumes many sellers

c. There is limited information in ebay whereas perfect competitive industry assumes full information for both buyers and sellers

d. There is no difference between these two markets

26. Low cost strategies are usually found in industries where

a. Products are not particularly differentiated

b. Price competion tends to be fierce

c. Both a and b

d. None of the above

Cigarettes - Price Elasticity of demand = - 0.67

A. Cigarettes

B. Alcohol

C. Sodas

D. None of the above

2. The demand for insulin will be ______________ than the demand for a Caribbean cruise in general

a. More elastic

b. More inelastic

c. Less elastic

d. Less inelastic

11-Short-run costs which increase and decrease as an output increases or decreases are called: a.Variable costs b.Secondary costs c.Derived costs d.Partial costs e.Potential costs 12.The addition to total cost resulting from the addition of the last unit of output is called the: a.Total variable cost b.Average variable cost c.Fixed cost d.Implicit cost e.Marginal cost 13.The fact that a single large factory may be more efficient than several smaller factories of the same total capacity is a reflection of: a.Increasing returns of scale. b.The law of diminishing marginal returns c.Comparative advantage d.The crowding-out effect e.Reproduction cost of assets 14.A possible reason for the existence of increasing return to scale is: a.The inability of a firm to increase all inputs proportionally b.Problems of coordination and control c.Higher input prices d.Larger fixed costs with a larger plant size. e.Greater specialization 15.The model of perfect competition is useful because: a.Most firms in the real world are perfectly competitive b.Perfectly competitive firms exert significant perfect competition. c.Government regulation is designed to eliminate perfect competition. d.It is a model of an ideal world which sheds much light on a market structure’s effects on resources allocation e.Advertising agencies are heavily dependent on the advertising dollars of perfectly competitive firms 16.A market consisting of many firms producing homogeneous products, having complete knowledge of relevant information, no power over the product’s market price, and low barriers to entry is characteristic of: a.Perfect competition b.Monopoly c.Monopolistic competition d.Oligopoly e.None of the above markets 17.A market consisting of many firms, low barriers to entry, some control over price, but considerable non-price competition is characteristic of: a.Perfect competition b.Monopoly c.Monopolistic competition d.Oligopoly e.None of the above. 18.A market consisting of a few firms producing similar products with significant barriers to entry is characteristic of: a.Perfect completion. b.Monopoly c.Monopolistic competition. d.Oligopoly e.None of the above

1. Characteristics of competitive markets

The model of competitive markets relies on these three core assumptions:

1. There must be many buyers and sellers a few players can't dominate the market.
2. Firms must produce an identical product buyer must regard all sellers' products as equivalent.
3. Firms and resources must be fully mobile, allowing for free entry into and exit from the industry.

The first two conditions imply that all consumers and firms are price takers. While the third is not necessary for price-taking behaviour, assume for this problem that a market cannot maintain competition in the long run without free entry.

Identify whether or not each of the following scenarios describes a competitive market, along with the correct explanation of why or why not.

Is the scenario Competitive?
Dozens of companies produce plain white socks. Consumers regard plain white socks as identical and don't care who manufactures their socks.  
In a major metropolitan area, one chain of coffee shops has gained a large market share because customers feel its coffee tastes better than that of its competitors.  
Scholastik Inc. owns the U.S. copyright to a popular book series. It is the only company with the legal right to publish books in the series in the United States.  
In a small town, there are two providers of broadband Internet access: a cable company and the phone company. The Internet access offered by both providers is of the same speed.