Market Organization
The market organization that has no barriers to exit + entry, and they are free to enter + exit at any time.
What is perfect competition?
Third party benefits from the consumption of others
What are positive externalities?
If we keep increasing one factor of production (keeping the rest fixed), we will reach a point where output increases at a diminishing rate
What is the law of diminishing returns?
What are the barriers to enter + exit?
NONE
How many continents are there?
7
The market organization that has no barriers to exit + entry, and they are free to enter + exit at any time.
What are the number of firms, barriers to exit + entry, organization of product, and market power?
Examples of subsidies to promote positive externalities?
Employers cover public trans. costs
Gov’t subsidies
Historical Homes
The equation to find total costs…
Fixed Costs + Variable Costs
When ATC is below MR…do they make a profit, loss, or break even?
Profit
What is the 49th state?
Alaska
The profit maximizing point of this market organization is BREAK EVEN.
What is perfect competition?
Find the subsidy.
Price producers receive = 70
Price consumers pay = 20
50
Explain the difference between total returns and marginal returns.
Total returns is the total produced. Marginal returns are when workers are added, MR increases at first, but eventually, additional workers will have a decreasing impact on production.
What does it mean to be a price taker?
Price of the homogenous good is set solely by market supply + demand
When did Hawai’i become a state?
1959
Provide a good or service at the most extreme price + maximize profit to the fullest extent
What are the goals of monopolies?
Where would you find the price received by producers after subsidies?
@ QOPT up to MSC curve
If total cost = 20, fixed costs = 8, variable costs = 12, and quantity produced = 5, find average fixed cost, average variable cost, and average total cost.
Average fixed cost = 1.6
Average variable cost = 2.4
Average total cost = 4
What would happen to the price and quantity of the shoes market if the price of socks increases?
Price of complements increases
Demand increases
Price and quantity increases
What class were we?
Royal Rebels, 2021
Name one example for each market organization (perfect competition, monopolistic competition, oligopoly, and monopoly.
Perfect competition: farmer's market,
Monopolistic competition: restaurants, fast food, soft drinks
Oligopoly: wireless providers, airplanes
Monopoly: garbage collectors, postal service
Corrective subsidy incentivizes producers + sellers to produce more for the betterment of society.
What happens to the price and quantity after corrective subsidy is applied?
P ↓, Q ↑
Compare and contrast the average total cost curve and the average variable cost curve.
Both are typically u-shaped. The average total cost curve starts off high due to fixed costs and the average variable costs lies below the ATC. The average total cost reaches breakeven point and the average variable costs reaches shutdown point.
If a substitute price decreases, how would that affect the market and firm you’re looking at?
Demand for firm decreases
P decreases
Q decreases
MR decreases
What academies were your tutors in?
Ms. Valois: APPS
Ms. Solomon: AHS