Professional Documents
Culture Documents
Econ
Econ
Product
Standardized or Differentiated
Nonprice Competition
None
Information
Complete and free information on price and product MR=MC, profit max. MC=P>min. AVC P=MR=SMC=LMC= SAC=LAC TR>TC econ. profit TR<TC econ. loss Entry=Loss Ex.=Profit Normal profit Supply=(MC is rising>AVC)
Significant Obstacles, High Entry or Exit by: -econ. Of scale -advertising -R&D Typically great deal, especially in product differentiation Restricted
Significant Obstacles, High Entry or Exit by: -econ. Of scale -advertising -R&D Typically great deal, especially in product differentiation Restricted
Blocked by: -economies of scale -patents -government franch. Mostly public relations advertising
Highly restricted
Profit
Supply
MR=LMC=SMC, where P=LAC=SAC but >MR TR>TC econ. profit TR<TC econ. loss Entry=LossEx.=Profit Normal profit P is not a unique f(x) of Q; No Supply Cur.
Joint MR=MC, profit max. AVC<P>MR MR=LMC= SMC @ MR=LMC TR>TC econ. profit TR<TC econ. loss Economic Profit because of barriers
TR>TC econ. profit TR<TC econ. loss Economic Profit because of barriers
MR=MC, profit max. AVC<P>MR MR=LMC=SMC where P>LMC and >LAC TR>TC econ. profit TR<TC econ. loss Economic Profit because of barriers P is not a unique f(x) of Q; No Supply Cur. P is not a unique f(x) of Q; No Supply
Efficiency
Produ. Alloc.
Dec. Cost=Downslop YES. P=Min. ATC YES. P=MC Pure Competition R&D is not emphasize because no incentive will plowback; easily copied P @ Md=Ms, where in very SR Ms is fix (l)
Cur.
NO. Opt. Q > Q @ mi. ATC NO. Opt. Q > Q @ mi. ATC NO. Opt. Q > Q @ mi. ATC NO. Opt. Q > Q @ mi. ATC
NO. P>MC Monopolistic C R&D is emphasize because of need to differentiate product P @Md=Ms, where in very SR Ms is fix
NO. P>MC Oligopoly-C R&D is of great effort to avoid falling prey to new rivals
NO. P>MC Oligopoly-NC R&D is of great effort to avoid falling prey to new rivals
NO. P>MC Monopoly R&D is of great effort to avoid falling prey to new rivals P is @ Opt. Q, where MR=MC, profit max. AVC<P>MR P is @ Opt. Q, where MR=LMC=SMC and P>MR and >LAC Local telephone, electricity
LongRun
P @ LMd=LMs
P @ LMd=LMs
Example