What happens to PERFECT COMPETITION in the LONG RUN?
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firms enter/exit the market in the long run.
- this occurs only until profits for all firms are zero.
- then there is no incentive to exit/enter the market
--------------
Thus P = MR =MC = min[ATC] in the long run
,Know the GRAPH describing an individual firm's short run decision.....
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Price
MR
MC
ATC
AVC
quantity produced
profit/loss
What are problems with trying to regulate a natural monopoly at price=MC (i.e. does
the monopolist lose money?)
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the firm loses money because the regulation would set the price at the
marginal cost which is under the average cost to make the product.
How do MONOPOLIES EMERGE?
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One producer in a market because barriers to entry keep other firms out of
the market
What is NASH EQUILIBRIUM and how do you fix it?
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solution to a non cooperative game between two or more players. each
player chooses their best strategy compared to other players strategy
What is the outcome of the oligopoly game without collusion?
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a PRISONERS DILEMMA -
Does MC depend on FC?
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Marginal Cost does not depend on fixed cost. Fixed costs are that of rent,
they do not change. Marginal Cost determines the maximum amount of
profit per one more unit produced.
What are SHORT RUN and LONG RUN effects of a shift in the demand curve or
supply curve?
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short run effects have U curves with sharp point and long run effects have
U curves will long bottom
Give this one a try later!
firms enter/exit the market in the long run.
- this occurs only until profits for all firms are zero.
- then there is no incentive to exit/enter the market
--------------
Thus P = MR =MC = min[ATC] in the long run
,Know the GRAPH describing an individual firm's short run decision.....
Give this one a try later!
Price
MR
MC
ATC
AVC
quantity produced
profit/loss
What are problems with trying to regulate a natural monopoly at price=MC (i.e. does
the monopolist lose money?)
Give this one a try later!
the firm loses money because the regulation would set the price at the
marginal cost which is under the average cost to make the product.
How do MONOPOLIES EMERGE?
Give this one a try later!
One producer in a market because barriers to entry keep other firms out of
the market
What is NASH EQUILIBRIUM and how do you fix it?
, Give this one a try later!
solution to a non cooperative game between two or more players. each
player chooses their best strategy compared to other players strategy
What is the outcome of the oligopoly game without collusion?
Give this one a try later!
a PRISONERS DILEMMA -
Does MC depend on FC?
Give this one a try later!
Marginal Cost does not depend on fixed cost. Fixed costs are that of rent,
they do not change. Marginal Cost determines the maximum amount of
profit per one more unit produced.
What are SHORT RUN and LONG RUN effects of a shift in the demand curve or
supply curve?
Give this one a try later!
short run effects have U curves with sharp point and long run effects have
U curves will long bottom
