2 Learning Outcomes Upon completion of this chapter, you will be able to: Explain how firms in perfect competition determine output and why firms are price takers Explain how monopolists determine price and output and why they are price makers Use simple calculus to calculate the profit maximisation output for perfect competitive firms and monopolists Compare perfect competition with monopoly from the point of social efficiency Explain the managerial implications of perfect competition and monopoly.
3 Price-Output Decisions of Firms Basic Business Decisions: What Output level to produce to max Profits? What Price to charge? At these levels of P & Q, what is profit level? The answer depends on the structure (organization) of the market If firm incurs losses: should it continue operating in the short-run (and in the long run, hoping that things may change) or should firm close down and exit the market? What if firm s objective is to maximise revenue? What values for P & Q?
4 Market Structure Spectrum More Competitive Less Competitive Perfect Competition Monopolistic Competition Oligopoly Monopoly
5 Comparative Characteristics of Markets Perfect Competition Monopolistic Competition Oligopoly Monopoly Number & Nature of Sellers Many (small sellers) Independent Many (small to medium) Few (large) Inter-dependent One Price No control Some control Considerable control Absolute control Nature of Product Homogeneous (no differentiation) Some differentiation Sometimes but not always No substitutes Barriers to entry None Low Considerable Entry is blocked Profit Potential Normal Profits in LR Some profits in SR & LR Considerable Profits in SR & LR Large Profits in SR & LR Product Promotion & Advertising None or minimal Considerable Heavy Some but not directed at rivals, but to increase sales
6 Characteristics of Perfect Competition many sellers so no individual believes that their own action can affect market price firms take price as given so face a horizontal demand curve the product is homogeneous (identical, similar) perfect customer information/knowledge about price, product features & quality, location of sellers, etc free entry and exit of firms Perfect mobility of resources Examples: - Stock Market - Wheat market
7 Perfect Competition Based on these characteristics of PC: Firms are price takers Each firm produces a very small % of entire market Non-price competition activities are not necessary or possible Each firm s demand curve is horizontal (perfectly elastic) This means that P = AR = MR
8 Demand Curve in PC Horizontal demand curve: P = AR = MR buyers will buy ALL that firm can sell at the going market price. firm s MR is same for each additional unit of product equal to the price of the product. Let s prove this: Recall that TR = P * Q AR = TR / Q AR = (P * Q ) / Q Thus P=AR MR = dtr / dq = d(p * Q) / dq. Since firms are price-takers, P does not change, P ( dq/dq) = P Thus P=MR
9 PC: P & Q Determination Prices are determined in the market Consider the following demand and supply functions: Qd = P Qs = P At equilibrium, Qd = Qs P = P 20P = 200 P e = 10 Q e = 150
10 Firm Decisions in Perfect Competition Competitive Industry Competitive Firm S P e =10 E D=P=AR=MR Q e =150 D Q Q The firm accepts P e = 10 as given, and decides what output to produce where MR = MC to maximize profits.
11 Total Revenue, Total Cost & Profit Total revenue: Average revenue: Marginal revenue: TR = P*Q AR = TR / Q MR = ΔTR / ΔQ. Total cost: Average total cost: Average variable cost: Marginal cost: TC = TFC + TVC ATC = TC / Q AVC = TVC / Q MC = ΔTC / ΔQ. Π = TR TC Max Π = Max(TR TC)
12 PC: SR Profit Maximization Total Revenue-Total Cost approach: Compare the total revenue and total cost schedules and find the level of output that either maximizes the firm s profits or minimizes its loss. Profit = TR TC =(P - AC) Q* Marginal Revenue Marginal Cost Approach To maximize profit firm produces where the additional revenue (MR) received from the last unit is equal to the additional cost (MC) of producing that unit. That is, where MR=MC. In perfect competition, the optimal output (Q*) is where P=MR=MC (since P=MR in perfectly competitive markets)
13 PC: Hypothetical Data Q TR= P * Q TC=ATC *Q Π= TR- TC AR ATC MR= ΔTR/ΔQ MC= ΔTC/ΔQ
15 PC: SR Profit Max: Marginal Approach MR = MC at Q =5 and P= 10. At this Q, ATC 1 = 8. Thus the firm makes a per unit profit of 2, or total profits of 10.
16 PC: SR Profit Maximization If firm s costs are represented by ATC 2, where MR = MC, ATC 2 > P losses. The decision Rule is: If P > AVC stay in operations. If P < AVC close down.
17 Contribution Margin Contribution Margin the amount by which price or average revenue (or total revenue) exceeds average variable cost (total variable cost). CM = AR(=P) AVC or TR TVC If AR(=P) > AVC CM is positive, and the firm should continue to produce in the short run This way, it covers part of its fixed costs. If AR(=P) < AVC CM is negative, so the firm should shut down.
18 Shutdown Point: Shut-down Point This is the lowest price at which the firm would still produce. At the shutdown point, the price is equal to the minimum point on the AVC. At the shutdown point, P = AVC and this results in zero contribution margin. If the price falls below the shutdown point, revenues fail to cover the fixed costs and the variable costs. In this case it would be better for the firm to shut down and accept the losses that are equal to its fixed costs.
19 PC: SR Decision with Losses Assume now that at the point where MR = MC, costs are represented by ATC 2 where ATC 2 > P and the firm is making losses. The decision Rule is: As long as P > AVC stay in operations. If P < AVC close down. $ MC ATC AVC 1 P* P=MR AVC 2 Q* Q
20 PC: SR Supply Curve MC = S SR $ P 3 E 3 P 3 = MR 3 P 2 E 2 P 2 = MR 2 P 1 P 0 E 0 E 1 AVC P 1 = MR 1 P 0 = MR 0 Shut-down point Q
21 PC: Industry Supply Curve $ MC 1 =S SR1 MC 2 =S SR2 S MKT P 3 P 2 P 1 P Q
22 PC: Long-Run Equilibrium Quantity is set by the firm so that short-run: Price = Marginal Cost = Average Total Cost At the same quantity, long-run: Price = Marginal Cost = Average Cost Economic Profit = 0
23 PC: Long-Run Equilibrium Industry Firm S 1 S 2 At D 1, typical firm is making profits (AR>LRAC) LRAC P 1 P 2 E 1 E 2 D Q Q Q* In short run (with market price at P 1 ) firms in PC make profits. As a result, new firms will enter and industry, and the supply curve will shift to the right. This will lead to a new Equilibrium point and cause Price to fall. The new firm demand curve is tangent to the firm s LRAC. Economic Profit = 0 } D 1 D 2 With D 2, typical firm is making ZERO economic profits (AR=LRAC)
24 Monopoly Single seller that produces a product with no close substitutes Many buyers Absolute control on prices Large profit potential Entry is blocked; in other words, there are barriers to entry Examples: CYTA (?), EAC, POST OFFICE
25 Barriers to Entry Economies of Scale (Natural Monopolies) Ownership/Control of Key Resources/Inputs or Sales Outlets Legal Protection (licensing agreements, patents, copyrights, franchise agreements) Large Capital Investment Requirements Brand Loyalty
26 Monopoly: P & Q decisions in SR Demand curve for the firm is the market demand curve Number of buyers in the market (the population) is same as customer base of monopolist To max Profits, firm produces a quantity (Q*) where MR=MC
27 Demand & MR Curves Price 100 MR curve has twice the slope of the Demand curve. Demand function: P=a-bQ slope is b TR function: P*Q = (a-bq)q = aq-bq 2 MR =dtr/dq = a-2b slope is -2b P=100 10Q MR=100 20Q 5 10 Quantity
28 Monopoly: P & Q decisions in SR Firm produces π-max. quantity Q* where MR=MC, subject to checking the following condition: if price is above ATC firm produces Q* at a profit. if price is between ATC and AVC firm produces Q* at a loss. if price is below AVC (P < AVC) which means that price does not cover average variable cost, (i.e., contribution margin is negative) then the firm should shut down (Q*=0).
29 Profit Making Monopoly
30 Loss Making Monopoly
31 Demand, MR & Total Revenue Price & MR 8 E P > 1 Demand Curve TR = P * Q. Maximum TR occurs at Q TR *, where MR = 0. MR lies below P (AR). At output levels greater than QTR*, MR is negative. Monopolist will always produce at elastic portion of D-curve. TR MR Q Total Revenue Curve Q TR * Q
32 Monopoly vs. Perfect Competition If a monopolist buys up all the firms in a competitive industry, then the industry s D-curve becomes the monopolist s D-curve, and the industry s S-curve becomes the monopolist s MC curve. Optimum Q* (where MR=MC) for monopolist is now Q 2 (not Q 1 reached in the market under perfect competition). Monopolist
33 Stage 1: Market under Perfect Competition Price Consumer Surplus Equilibrium (D=S): Optimum market outcome under PC. Social MR=Social MC. Socially efficient outcome. P C S LR D Q C Q
34 Price Stage 2: Market taken over by Monopoly π-max.: Optimum outcome in Monopoly where MR=MC. P* and Q M * are π-max. values. P* P C MC LR MR D Q M * Q C Q
35 Stage 2: Loss of Consumer Surplus Price New Consumer Surplus Loss of Consumer Surplus P* Deadweight Loss P C MC LR MR D Q* Q C Q
36 Monopoly vs. Perfect Competition So we see that monopoly compared with perfect competition implies: higher price lower output Under Monopoly there is loss of efficiency for the economy Efficiency means: Price = MC Smaller consumer surplus Does the consumers always lose from monopoly? Among other things, this depends on whether the monopolist faces the same cost structure There may be the possibility of economies of scale. Technological innovations may benefit society
37 Managerial Implications Perfect Competition Profit potential in Perfect Competition is very low Being cost efficient is key to survival Timing of entering the market is key for making SR profits. Failure rate is high because of overestimating demand potential Monopoly IT revolution (internet, e-commerce) and market changes reduce the pricing power of monopolies Barriers to entry are less effective Deregulation & privatizations lead to the extinction of monopolies Generic brands increase competition
Managerial Economics & Business Strategy Chapter 8 Managing in Competitive, Monopolistic, and Monopolistically Competitive Markets I. Perfect Competition Overview Characteristics and profit outlook. Effect
Problems on Perfect Competition & Monopoly 1. True and False questions. Indicate whether each of the following statements is true or false and why. (a) In long-run equilibrium, every firm in a perfectly
WSG8 7/7/03 4:34 PM Page 113 8 Market Structure: Perfect Competition and Monopoly OVERVIEW One of the most important decisions made by a manager is how to price the firm s product. If the firm is a profit
UNIT 6 cont PRICING UNDER DIFFERENT MARKET STRUCTURES Monopolistic Competition Market Structure Perfect Competition Pure Monopoly Monopolistic Competition Oligopoly Duopoly Monopoly The further right on
Chapter 6 The Two Extremes: Perfect Competition and Pure Monopoly Learning Objectives List the four characteristics of a perfectly competitive market. Describe how a perfect competitor makes the decision
MPP 801 Perfect Competition K. Wainwright Study Questions MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) Refer to Figure 9-1. If the price a perfectly
Chapter 6 Competitive Markets After reading Chapter 6, COMPETITIVE MARKETS, you should be able to: List and explain the characteristics of Perfect Competition and Monopolistic Competition Explain why a
Principles of Microeconomics, Quiz #5 Fall 2007 Name MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question on the accompanying scantron. 1) Perfect competition
Perfectly Competitive Markets It is essentially a market in which there is enough competition that it doesn t make sense to identify your rivals. There are so many competitors that you cannot single out
In this chapter, look for the answers to these questions: What is a perfectly competitive market? What is marginal revenue? How is it related to total and average revenue? How does a competitive firm determine
Chapter 14: Firms in Competitive Markets Profit and Revenue The firm's goal is to maximize profit. Profit = total revenue - total cost (opportunity cost) Total revenue = price per unit sold number of units
Understanding Economics 2nd edition by Mark Lovewell and Khoa Nguyen Chapter 5 Perfect Competition Chapter Objectives! In this chapter you will: " Consider the four market structures, and the main differences
Practice Questions Week 8 Day 1 Multiple Choice Identify the choice that best completes the statement or answers the question. 1. The characteristics of a market that influence the behavior of market participants
MBA 640 Survey of Microeconomics Fall 2006, Quiz 6 Name MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) A monopoly is best defined as a firm that
R. Larry Reynolds Pure Competition urely competitive markets are used as the benchmark to evaluate market P performance. It is generally believed that market structure influences the behavior and performance
Microeconomics Instructor Miller Practice Problems Monopolistic Competition 1. A monopolistically competitive market is described as one in which there are A) a few firms producing an identical product.
Chapter 8. Competitive Firms and Markets We have learned the production function and cost function, the question now is: how much to produce such that firm can maximize his profit? To solve this question,
Chapter 13 Perfect Competition 13.1 A Firm's Profit-Maximizing Choices 1) What is the difference between perfect competition and monopolistic competition? A) Perfect competition has a large number of small
ANSWERS TO END-OF-CHAPTER QUESTIONS 23-1 Briefly indicate the basic characteristics of pure competition, pure monopoly, monopolistic competition, and oligopoly. Under which of these market classifications
1 I S L 8 0 5 U Y G U L A M A L I İ K T İ S A T _ U Y G U L A M A ( 4 ) _ 9 K a s ı m 2 0 1 2 CEVAPLAR 1. Conigan Box Company produces cardboard boxes that are sold in bundles of 1000 boxes. The market
Equilibrium of a firm under perfect competition in the short-run. A firm is under equilibrium at that point where it maximizes its profits. Profit depends upon two factors Revenue Structure Cost Structure
Monopoly Monopoly is a market structure in which one form makes up the entire supply side of the market. That is, it is the polar opposite to erfect Competition we discussed earlier. How do they come about?
Principles of Microeconomics Fall 2007, Quiz #6 Name MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question on the accompanying scantron. 1) A monopoly is
CHAPTER 9: PURE COMPETITION Introduction In Chapters 9-11, we reach the heart of microeconomics, the concepts which comprise more than a quarter of the AP microeconomics exam. With a fuller understanding
Econ 111 (04) 2nd Midterm A MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) Which one of the following does not occur in perfect competition? A)
CHAPTER CHECKLIST Monopoly Chapter 13 1. Explain how monopoly arises and distinguish between single-price monopoly and price-discriminating monopoly. 2. Explain how a single-price monopoly determines its
MPP 801 Monopoly Kevin Wainwright Study Questions MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) The marginal revenue facing a monopolist A) is
AP Microeconomics Review 1. Firm in Perfect Competition (Long-Run Equilibrium) 2. Monopoly Industry with comparison of price & output of a Perfectly Competitive Industry 3. Natural Monopoly with Fair-Return
In this chapter, look for the answers to these questions: Why do monopolies arise? Why is MR < P for a monopolist? How do monopolies choose their P and Q? How do monopolies affect society s well-being?
Summary Chapter 12 Monopoly Defining Monopoly - A monopoly is a market structure in which a single seller of a product with no close substitutes serves the entire market - One practical measure for deciding
CHAPTER 10 MARKET POWER: MONOPOLY AND MONOPSONY EXERCISES 3. A monopolist firm faces a demand with constant elasticity of -.0. It has a constant marginal cost of $0 per unit and sets a price to maximize
EXAM TWO REVIEW: A. Explicit Cost vs. Implicit Cost and Accounting Costs vs. Economic Costs: Economic Cost: the monetary value of all inputs used in a particular activity or enterprise over a given period.
In this chapter, look for the answers to these questions: How is similar to perfect? How is it similar to monopoly? How do ally competitive firms choose price and? Do they earn economic profit? In what
UNIVERSITY OF CALICUT SCHOOL OF DISTANCE EDUCATION BA ECONOMICS III SEMESTER CORE COURSE (2011 Admission onwards) MICRO ECONOMICS - II QUESTION BANK 1. Which of the following industry is most closely approximates
Chap 13 Monopolistic Competition and Oligopoly These questions may include topics that were not covered in class and may not be on the exam. MULTIPLE CHOICE. Choose the one alternative that best completes
Perfect Competition Chapter 10 CHAPTER IN PERSPECTIVE In Chapter 10 we study perfect competition, the market that arises when the demand for a product is large relative to the output of a single producer.
Chapter 12 monopoly 1. A monopoly firm is different from a competitive firm in that A) there are many substitutes for a monopolist's product but there are no substitutes for a competitive firm's product.
CHAPTER 11 PRICE AND OUTPUT IN MONOPOLY, MONOPOLISTIC COMPETITION, AND PERFECT COMPETITION Chapter in a Nutshell Now that we understand the characteristics of different market structures, we ask the question
Chapter 15 1. a. What are the three sources of the barriers to entry that allow a monopoly to remain the sole seller of a product? A key resource is owned by a single firm (monopoly resource), the government
STATE COUNCIL OF EDUCATIONAL RESEARCH &TRAINING VARUN MARG, DEFENCE COLONY, NEW DELHI Question Bank With Solution For Class XII PGT (Economics) Chief Advisor Ms. Rashmi Krishnan, Director, SCERT Advisors
Price Theory Lecture 6: Market tructure Perfect Competition I. Concepts of Competition Whether a firm can be regarded as competitive depends on several factors, the most important of which are: The number
ECON 600 Lecture 3: Profit Maximization I. The Concept of Profit Maximization Profit is defined as total revenue minus total cost. Π = TR TC (We use Π to stand for profit because we use P for something
Chapter 12 Monopoly - Sample Questions MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) Unregulated monopolies A) cannot change the market quantity.
Pre-Test Chapter 21 ed17 Multiple Choice Questions 1. Which of the following is not a basic characteristic of pure competition? A. considerable nonprice competition B. no barriers to the entry or exodus
CHAPTER 12 MARKETS WITH MARKET POWER Microeconomics in Context (Goodwin, et al.), 2 nd Edition Chapter Summary Now that you understand the model of a perfectly competitive market, this chapter complicates
CHAPTER 10: PURE MONOPOLY Introduction While the perfectly competitive firm has no power over prices in the marketplace, the monopoly has the power necessary to determine both the price and output of the
Managerial Economics Unit 3: Perfect Competition, Monopoly and Monopolistic Competition Rudolf Winter-Ebmer Johannes Kepler University Linz Winter Term 2012 Winter-Ebmer, Managerial Economics: Unit 3 1
Chapter 7 Monopoly, Oligopoly and Strategy After reading Chapter 7, MONOPOLY, OLIGOPOLY AND STRATEGY, you should be able to: Define the characteristics of Monopoly and Oligopoly, and explain why the are
CHAPTER 6 MARKET STRUCTURE CHAPTER SUMMARY This chapter presents an economic analysis of market structure. It starts with perfect competition as a benchmark. Potential barriers to entry, that might limit
Chapter 8 Production Technology and Costs 8.1 Economic Costs and Economic Profit 1) Accountants include costs as part of a firm's costs, while economists include costs. A) explicit; no explicit B) implicit;
Practice Multiple Choice Questions Answers are bolded. Explanations to come soon!! For more, please visit: http://courses.missouristate.edu/reedolsen/courses/eco165/qeq.htm Market Equilibrium and Applications
Monopoly: Linear pricing Econ 171 1 The only firm in the market Marginal Revenue market demand is the firm s demand output decisions affect market clearing price $/unit P 1 P 2 L G Demand Q 1 Q 2 Quantity
Final Exam Economics 101 Fall 2003 Wallace Final Exam (Version 1) Answers 1. The marginal revenue product equals A) total revenue divided by total product (output). B) marginal revenue divided by marginal
Models of Imperfect Competition Monopolistic Competition Oligopoly Models of Imperfect Competition So far, we have discussed two forms of market competition that are difficult to observe in practice Perfect
Chapter 9: Perfect Competition Perfect Competition Law of One Price Short-Run Equilibrium Long-Run Equilibrium Maximize Profit Market Equilibrium Constant- Cost Industry Increasing- Cost Industry Decreasing-
Microeconomics Topic 7: Contrast market outcomes under monopoly and competition. Reference: N. Gregory Mankiw s rinciples of Microeconomics, 2 nd edition, Chapter 14 (p. 291-314) and Chapter 15 (p. 315-347).
Chapter 15: While a competitive firm is a taker, a monopoly firm is a maker. A firm is considered a monopoly if... it is the sole seller of its product. its product does not have close substitutes. The
MANAGERIAL ECONOMICS: THEORY, APPLICATIONS, AND CASES W. Bruce Allen Keith Weigelt Neil Doherty Edwin Mansfield CHAPTERS 6-7 Perfect Competition, Monopoly, And Monopolistic Competition OBJECTIVES Explain
Market Structures This hand-out gives an overview of the main market structures including perfect competition, monopoly, monopolistic competition, and oligopoly. Summary Chart Perfect Competition Monopoly
Recap What do we know about efficiency so far? Key Efficiency Definitions Recap Allocative Efficiency Productive Efficiency Static Efficiency The optimum allocation of scarce resources that best accords
Pre-Test Chapter 23 ed17 Multiple Choice Questions 1. The kinked-demand curve model of oligopoly: A. assumes a firm's rivals will ignore a price cut but match a price increase. B. embodies the possibility
Principles of Economics: Micro: Exam #2: Chapters 1-10 Page 1 of 9 print name on the line above as your signature INSTRUCTIONS: 1. This Exam #2 must be completed within the allocated time (i.e., between
Economics 147 John F. Stewart Theory of Perfectly Competitive Markets University of North Carolina Chapel Hill Theory: The Structure of an Economic Model Economic theory is based on deductive logic, if
University of Pacific-Economics 53 Lecture Notes #15 I. Features of Monopolistic Competition Like the name suggests, a monopolistically competitive industry has features from both a monopoly market structure
EconS 301 Review Session #8 Chapter 11: Monopoly and Monopsony 1. Which of the following describes a correct relation between price elasticity of demand and a monopolist s marginal revenue when inverse
ECON 103, 2008-2 ANSWERS TO HOME WORK ASSIGNMENTS Due the Week of June 23 Chapter 8 WRITE  Use the demand schedule that follows to calculate total revenue and marginal revenue at each quantity. Plot
chapter 9 The industry supply curve shows the relationship between the price of a good and the total output of the industry as a whole. Perfect Competition and the >> Supply Curve Section 3: The Industry
Economics 101 Fall 2013 Answers to Homework 5 Due Tuesday, November 19, 2013 Directions: The homework will be collected in a box before the lecture. Please place your name, TA name and section number on
Topic 8 Chapter 13 Oligopoly and Monopolistic Competition Econ 203 Topic 8 page 1 Oligopoly: How do firms behave when there are only a few competitors? These firms produce all or most of their industry
Monopoly: static and dynamic efficiency M.Motta, Competition Policy: Theory and Practice, Cambridge University Press, 2004; ch. 2 Economics of Competition and Regulation 2015 Maria Rosa Battaggion Perfect
Name: Date: 1. Most electric, gas, and water companies are examples of: A) unregulated monopolies. B) natural monopolies. C) restricted-input monopolies. D) sunk-cost monopolies. Use the following to answer
Eco 301 Name Test 2 8 November 2006 100 points. Please write all answers in ink. You may use pencil and a straight edge to draw graphs. Allocate your time efficiently. 1. A fast-food restaurant currently
Chapter 11 PERFECT COMPETITION Competition Topic: Perfect Competition 1) Perfect competition is an industry with A) a few firms producing identical goods B) a few firms producing goods that differ somewhat
Economics 165 Winter 2002 Problem Set #2 Problem 1: Consider the monopolistic competition model. Say we are looking at sailboat producers. Each producer has fixed costs of 10 million and marginal costs
WSG10 7/7/03 4:24 PM Page 145 10 Market Structure: Duopoly and Oligopoly OVERVIEW An oligopoly is an industry comprising a few firms. A duopoly, which is a special case of oligopoly, is an industry consisting
Intermediate Microeconomics Economics 435/735 Fall 0 Answers for Practice Problem Set, Chapters 6-8 Chapter 6. Suppose a chair manufacturer is producing in the short run (with its existing plant and euipment).
Chapter 7: Market Structure in Government and Nonprofit Industries Soft Drinks HTTP:/www.economics.emory.edu/Working_Pa pers/wp/2008wp/frisvold_08_08_paper.pdf What is a Market? A market is a process in
Lab 12: Perfectly Competitive Market 1. Perfectly competitive market 1) three conditions that make a market perfectly competitive: a. many buyers and sellers, all of whom are small relative to market b.
1. Which of the following would shift the demand curve for new textbooks to the right? a. A fall in the price of paper used in publishing texts. b. A fall in the price of equivalent used text books. c.
COST THEORY Cost theory is related to production theory, they are often used together. However, the question is how much to produce, as opposed to which inputs to use. That is, assume that we use production
ECONOMICS 10-008 Dr. John Stewart Feb. 13, 2001 Exam 1 Instructions: Mark the letter for your chosen answer for each question on the computer readable answer sheet using a No.2 pencil. Please note that
Your consent to our cookies if you continue to use this website.