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Microeconomics - Coggle Diagram

- - - - 1) Calculate Profit in Monopoly ( Profit = p*q - TC(q))
      - Surplus calculations :red_cross:
        
        Scons
        
        Scons : (pmax-p)p/2
        
        S prod
        
        PPC= (q-0) q / 2
        
        Monopoly : (q-0) q / 2 + ( p - q) q
      - 2) calculate equilibrium in PPC ( 1) equalise Mc= P(q) / find q / replace q to find p)
  - - - Method: I need to had p and q in PPC/ Subsidy = Mc(qc) - Mr(qc) / we know Mr and Mc from the beginning, replace q and p in them/ replace in to find the subsidy
      - Know the graph : Mr +s so that back at equilibrium where Mc=p
    - - Method : Ls= profit in PPC + Sq (q*q) - Profit in Monopoly
  - - - Method consider min p to be the value in TC (ex:10)/ replace p in qA and qB , find values / S cons=0 always / S prod= Scons A (PPC) + Sscons B (PPC)
      - Context: Perfect information, so personalized pricing / No DWL, collective surplus is maximised / Scons =0 and Scons maximised
      - Find the first degree discrimination with 2 parts tariff :no_entry:
- - - - Cournot Nash (no domination)
        
        1) Rewrite the profit function taking into account quantity of other firm
        
        2) maximise profit based on q of the firm and =0
        
        3) equalise Mr and Mc -> find q of the firm "optimal qty that Firm should produce in function of other firm's q"
        
        4) Find values: Q1, Q2, Profit 1, Profit 2
        
        Graph representation
        
        Isoprofit functions
        
        Context: "Each firm maximises their profit assuming qty produced by the other doesn't impact decisions"
      - Stackelberg model (with domination)
        
        Context: "Leading firm knows RF of the other, can anticipate reactin and max their revenue"
        
        1) If F2 is the leading firm : Find RF1
        
        2) add RF1 to Profit 2
        
        3) Maximise Profit
        
        4) Find q2 and deduce q1
        
        Graph representation
    - - Context: "If one Firm has the lowest cost, they can put in place a strategy to evict other Firm"
      - Firm 1 leading : to determine predatory pricing note: p=AC2=MC2
      - 1) Find AC2 and MC2, replace value in p=... , isolate q2
      - 2) P=Mc, deduce p
      - Check: Find profit Firm 2 must be =0
      - Graph representation
    - - Context: "Dominating Firm is price maker, they have a monopoly situation in the residual demand. Firm 2 is price taker and act as in PPC (p=Mc)"
      - F1 dominating , Determine equilibrium : 1) determine supply of F2 (PPC so p=MC, find q2)
      - 2) Demand to F1: in p(q) add -q1 and -q2 replace q2 / isolate p
      - 3) Profit of Firm 1: replace by p found in 2) / max profit / Mr=Mc / find q1 and deduce p by replacing
      - 4) Find profit Firm 1 and Firm 2
    - - Context: "Firm 1 is dominant and sees Firm 2 as a threat, wants to determine a limit price and qty to discourage Firm 2 to enter the market"
      - F1 Dominating, determine price limit : 1) Find RF2 -> q2=
      - 2) replace RF2 in Profit 2
      - 3) equalise Profit 2=0 find q1 / deduce q2 / deduce p
  - - - Launhardt Hotelling :warning:
        
        Sweezy model :no_entry:
        
        With domination
        
        Context: No domination between the firms / Price a different from Price b / qty of of q1 is in function of its price but also of the other good
        
        RF function increasing : when a firm increases its price the other firm will too
        
        Cross price elasticity : If Firm increases p1 then q2 increases
        
        Without domination : A la Cournot .
  - - - Linear City model
        
        1) Determine Demand A and B :check:
        
        1) Equalise : Pa + transportation cost= Pb+transportation cost / put x on the left :check:
        
        2) Determine demand to shop A : Da= consumer (200)* transportation cost (x) / do the same for Db :check:
        
        Remember : distance from A to x = x / distance B to x = 1-x
        
        2) RF form A :warning:
        
        Transportation cost drops to 0 - Determine new equilibrium :no_entry:
        
        We are in the Bertrand model
        
        How can the linear city model be used to explain public choices and political decisions in a systems of majority voting ? :no_entry: