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6 Cards in this Set
- Front
- Back
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Adam Smith's theories of microeconomics |
Modern economics founder, created classical economics, and promoted laissez-faire policies and was a free market capitalist. Known as the invisible hand for self regulated markets |
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Elasticity |
Refers to how one variable changes in response to another. Prize elasticity of demand equals percent change in the quantity demanded divided by percent change in the price. |
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Perfect competition |
All companies make products that are exactly the same. They are identical, and because of this common no one firm has a large market share. Firms do not have control over pricing. |
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Monopolistic competition |
Many different producers that sell similar but not identical products. A form of imperfect competition. |
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Oligopoly |
Occurs when there are only a small amount of businesses supplying a certain product, meaning there is very limited competition. Higher pricing and profits. |
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Monopoly |
Occurs when one company is the only provider of a product. There is no competition and no reasonable substitute that consumers can purchase. |
