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9 Cards in this Set
- Front
- Back
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What is demand
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the demand curve tells us what will be demanded at each point.
-the demand curve is downward slopping: the lower the price of apples the, the higher the quantity of apples that will be demanded. |
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What determines price?
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Price is determined by the intersection of the supply and demand.
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In a competitive market, the price is established in the....
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market. They are price-takers
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Characteristics of a competitive market (price takers)
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1) Large numbers of buyers and sellers
2) Perfect infomraiton about the market price of apples 3) Product is homogenous. |
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Derived Demand
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Firms are employing/hiring workers in order to produce an output.
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Name 4 Industry Structures of Product Markets in decreasing order of competition
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1) Perfect comeptition
2) Monopolitic 3) Oligopoly 4) Monopoly |
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Demand for Labour
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Is the quantity of labour services the firm would employ at each wage, depends on the firms constraints.
-objective is to maximize profit |
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Short-run of a Competitive Firm
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In the short0run in a competitive firm, the profit max is a function of output change.
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Optimal level of output
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MR=MC
The optimal decision rule for hiring an additional worker os wjere tje extra revenue generated by the last worker=the extra expense incurred from hiring |
