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33 lines
2.5 KiB
Markdown
33 lines
2.5 KiB
Markdown
- has→
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- market power→when it's not perfectly competitive, somebody has market power and can choose the quantity/price
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- total revenue→all revenue, price X quantitiy.
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- Competitive market ↓
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- each participant negligible→countless small buyers and sellers
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- free entry→firms can enter and exit with ease.
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- perfect information→all useful info, like prices, quality, are freely availa
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- no externalities→(only buyer and seller affected)
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- Long Run↔longer timeframe, lets production inputs change
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- Short Run↔Too short a time frame to change many inputs.
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- Fixed Inputs↔Inputs that can only be changed in the [[firms in competitive markets/Long Run]]
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- costs↔paid, even if the output is zero; [[Total Cost]] at Q = 0
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- Variable Inputs↔those can be changed in the [[firms in competitive markets/Short Run]]
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- costs↔cost of Variable inputs; $VC = TC - FC$
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- Total Cost↔Total cost of production
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- Average Total Cost ↓
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- cost per unit
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- [[Total Cost]] at Quantity / Quantity
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- U-shaped, since you start out spreading out fixed costs, then it rises again when production becomes overworked. (more workers/money doesn't always solve the problems caused by overcrowding, not enough machines, not enough space etc)
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- Economies of Scale↔on the [[firms in competitive markets/Long Run]] ,[[firms in competitive markets/Average Total Cost]] can go back up much later, due to advantages of scale on reducing [[firms in competitive markets/Marginal Cost]]
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- intersects→[[firms in competitive markets/Marginal Cost]] curve at the lowest point
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- Average Fixed Cost ↓
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- [[firms in competitive markets/Fixed Inputs/costs]] at Quantity/ Quantity
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- Average Variable Cost ↓
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- [[firms in competitive markets/Variable Inputs/costs]] at Quantity / Quantity
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- Marginal Cost ↓
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- cost of one more unit, usually rises constantly
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- [[Total Cost]] at Quantity - [[Total Cost]] at (Quantity-1)
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- $MCQ = TCQ-TC(Q-1)$
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- [[firms in competitive markets/Costs image https:--remnote-user-data.s3.amazonaws.com-EqOF_apOvptyPrmS58Hv5lbH6pEX2aIjrjKIXjh58yjXlw0vEhq_sKc2gLfyexiT4vuO3te-GH6whNaZ_6X83YMgmPIqHrM95Z-jd9hWVMCkfz-sHVkBEkzHTemnk08Q.png]]
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- intersects→[[firms in competitive markets/Average Total Cost]] at its lowest point, always.
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- Costs image ![[https://remnote-user-data.s3.amazonaws.com/EqOF_apOvptyPrmS58Hv5lbH6pEX2aIjrjKIXjh58yjXlw0vEhq_sKc2gLfyexiT4vuO3te-GH6whNaZ_6X83YMgmPIqHrM95Z-jd9hWVMCkfz-sHVkBEkzHTemnk08Q.png]]
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