question
nonprice competition
answer
emphasizing factors other than price to distinguish a product from competing brands (advertising)
question
Q x P =
answer
TR
question
Marginal Revenue is
answer
Change in TR (total revenue)
question
Elastic
answer
MR increasing and Price decreases
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Inelastic
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MR and Price are both decreasing or increasing
question
Natural Monopoly
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one firm can produce the socially optimal quantity at the lowest cost due to economies scale
question
Per Unit
answer
Variable Costs
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Lump Sum
answer
Fixed Costs
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Socially Optimal Price
answer
P=MC (allocative efficiency)
question
Fair-Return Price (Break Even)
answer
P=ATC (normal profit)(no economic profit)
question
Unregulated
answer
MR=MC but go up to the demand curve
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Price Discrimination
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Practice of Selling the Same Products to Different Buyers at Different Prices (MR=D)
question
Excess Capacity
answer
- Given current resources, the firm can produce at the lowest costs (minimum ATC) but they decide not to
- The gap between the minimum ATC output and the profit maximizing output
- Not the amount underproduced
- The gap between the minimum ATC output and the profit maximizing output
- Not the amount underproduced
question
Game Theory
answer
the study of how people behave in strategic situations
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Dominant Strategy
answer
when a company makes the decision without having to wait for the other firm to makes their decision
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Nash Decision
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When both companies agree on a position and there is no better decision for them to make.
question
Collusion
answer
a non-competitive, secret, and sometimes illegal agreement between rivals which attempts to disrupt the market's equilibrium
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Has a lot of firms
answer
perfect and monopolistic competition
question
a few firms
answer
oligopoly
question
one firm
answer
pure monopoly
question
unique products
answer
monopoly
question
differentiated and identical products
answer
oligopoly
question
differentiated products
answer
monopolistic competition
question
identical products
answer
perfect competition
question
low barriers of entry
answer
perfect and monopolistic competition
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high barriers of entry
answer
monopoly and oligopoly
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Price Makers
answer
monopolistic competition, oligopoly, monopolies
question
Price Taker (no price setting power)
answer
perfect competition
question
a lot of nonprice competition
answer
monopolistic competition and oligopoly
question
no nonprice competition
answer
perfect comp.
question
some nonprice comp.
answer
monopoly
question
Not productively or allocatively efficient
answer
monopoly, oligopoly monopolistic comp.
question
IS EFFICIENT
answer
perfect comp.
question
0 long run profits 🙁
answer
perfect and monopolistic comp.
question
high long run profits 🙂
answer
oligopoly and monopolies
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