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  • ECON Diagrams

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    molly
    9 views9 pages
    1. The document contains diagrams illustrating concepts related to price floors and ceilings, taxes, technological change, losses, shutdown points, monopoly profits, and perfect price discrimination. 2. Key features shown include price inelasticity and elasticity, surplus, shortages, deadweight loss, marginal cost and average total cost curves, and profit maximization. 3. The diagrams demonstrate economic theories and market outcomes under different market structures and government interventions.

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    ECON diagrams

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    1. The document contains diagrams illustrating concepts related to price floors and ceilings, taxes, technological change, losses, shutdown points, monopoly profits, and perfect price discrimination. 2. Key features shown include price inelasticity and elasticity, surplus, shortages, deadweight loss, marginal cost and average total cost curves, and profit maximization. 3. The diagrams demonstrate economic theories and market outcomes under different market structures and government interventions.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as docx, pdf, or txt
    9 views9 pages

    ECON Diagrams

    Uploaded by

    molly
    1. The document contains diagrams illustrating concepts related to price floors and ceilings, taxes, technological change, losses, shutdown points, monopoly profits, and perfect price discrimination. 2. Key features shown include price inelasticity and elasticity, surplus, shortages, deadweight loss, marginal cost and average total cost curves, and profit maximization. 3. The diagrams demonstrate economic theories and market outcomes under different market structures and government interventions.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as docx, pdf, or txt
    of 9

    Price of

    D2 is price inelastic
    between point A and C

    D1 is price elastic
    A between point A and B

    B
    C

    D2 D1

    Quantity of
    Price Floors

    S Price floor
    (min. price
    sellers receive
    Surplus …

    D
    Price Ceiling

    Rent ($ per
    month)

    Black market
    rent price

    2 000

    1 500
    Price ceiling

    1 000

    Shortage of
    apartments

    1 900 000 Quantity


    2 000 000 2 100 000
    (apartments)
    Tax
    S2

    Tax Revenue

    Deadweight loss

    Firm when making profit

    MC
    ATC

    Q
    Diagram 1: Technological change in the wheat industry

    Wool
    (million
    tonnes)

    600
    400 800
    Wheat (million tonnes)

    Firm experiencing a loss

    MC
    ATC
    Losses

    ATC

    Q
    Firms short-run supply curve/shutdown point

    MC

    ATC

    AVC

    Shutdown point
    Monopolist earning economic profit

    MC

    ATC
    Profit- Profit
    maximising
    price

    MR
    D
    Perfect price discrimination

    Profit
    Marginal cost =
    average cost

    Demand = marginal revenue

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