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26 Cards in this Set
- Front
- Back
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PerfectCompetition - Profit maximization in Short run |
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Perfect Competition- Loss minimization in Short run |
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PerfectCompetition - Break even Short run |
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Perfect Competition- Normal profits in long run for Profit earning firms |
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Perfect Competition- Normal profits in long run for Profit losing firms |
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PerfectCompetition - Long run equilibrium in long run |
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Monopoly - Profit maximising firm |
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Monopoly - Loss minimising firm |
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Monopoly - Break even Firm |
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When a Monopolistic firm should shut down |
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Natural Monopoly - Economies of Scale |
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Government intervention in Natural monopolies |
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Efficiency in Monopoly |
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Price Discriminating Monopoly |
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Revenue curves for Monopolistic Competition |
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Monopolistic competition - Profit maximising firms in the long run |
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Monopolistic competition - Loss minimising firms in the long run |
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Monopolistic Competition in long-run equilibrium |
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Show efficiency in Monopolistic Competition |
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Show efficiency in Monopoly industry |
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Describe the efficiency in Perfect Competition |
•Pricewill always equal marginal cost (the allocatively efficient level of output) •Firmswill always produce at their minimum ATC (the productively efficient level ofoutput) |
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Describe the efficiency in Monopolies |
Without competition, however, monopolistsare NOT productively effficient |
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Long-run Equilibrium in Perfect Competition and Monopoly - wordy thing |
•In thelong-run , firms in perfectly competitive markets will only break even. - If the firm isearning economic profits in the short-run, those profits will be maintained aslong as the firm can keep demand for its goods high and its costs low - If the firm isearning economic losses in the short-run, those losses will be maintained aslong as the firm cannot increase the demand for its product or reduce itsprice. |
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Characteristics of markets |
Number of Firms Price making abilities of individual firms Type of product Entry barriers Efficiency PETEN |
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Characteristics of Pure monopoly |
Only ONE firm. The firm IS the industry Changes in the firm's output cause changes in the price, i.e. the firm is a price-maker! Unique product, no other firm makes anything like it. Significant barriers to entry exist, preventing new firms from entering and competing with the monopolist Will achieve neither allocative nor productive efficiency in the long-run ܣG>t' |
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Characteristics of Perfect competition |
VERY large number of firms Each firm is so small that changes in its own output do not affect market price, i.e. firms are price takers Firms all produce identical products, with no differentiation Completely free entry and exit from the industry, i.e. NO barriers to entry. Will achieve both allocative and productive efficiency in the long-run |
