Micro-Econ Flashcards
1
Q
Perfect competition (5 characteristics)
A
- Large # of ind. buyers / sellers - too small to affect price
- all firms sell homogeneous product / service
- resources are completely mobile
- buyers / sellers have perfect information
- Gov. does not set price
2
Q
Monopoly (reasons 3)
A
- Exclusive control of raw material
- Gov. grant franchise, include patents
- Economics of (increasing return) scale.
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
4
Q
Monopolistic ( 3 characteristics)
A
- large number of sellers
- Close substitutes for product
- Ease of entry into or exit from market.