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9 Cards in this Set

  • Front
  • Back
What is demand
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.
What determines price?
Price is determined by the intersection of the supply and demand.
In a competitive market, the price is established in the....
market. They are price-takers
Characteristics of a competitive market (price takers)
1) Large numbers of buyers and sellers

2) Perfect infomraiton about the market price of apples

3) Product is homogenous.
Derived Demand
Firms are employing/hiring workers in order to produce an output.
Name 4 Industry Structures of Product Markets in decreasing order of competition
1) Perfect comeptition

2) Monopolitic

3) Oligopoly

4) Monopoly
Demand for Labour
Is the quantity of labour services the firm would employ at each wage, depends on the firms constraints.

-objective is to maximize profit
Short-run of a Competitive Firm
In the short0run in a competitive firm, the profit max is a function of output change.
Optimal level of output

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