Micro-Econ Flashcards

1
Q

Perfect competition (5 characteristics)

A
  1. Large # of ind. buyers / sellers - too small to affect price
  2. all firms sell homogeneous product / service
  3. resources are completely mobile
  4. buyers / sellers have perfect information
  5. Gov. does not set price
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2
Q

Monopoly (reasons 3)

A
  1. Exclusive control of raw material
  2. Gov. grant franchise, include patents
  3. Economics of (increasing return) scale.
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3
Q

Monopolistic (short -run) Max profit

A

MR = MC

Revenue from the last unit produced is exactly equal to cost of producing that unit

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4
Q

Monopolistic ( 3 characteristics)

A
  1. large number of sellers
  2. Close substitutes for product
  3. Ease of entry into or exit from market.
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