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Unit 4, Unit 5 - Coggle Diagram

- - - - scarce resources, economies of scale, technology, government restrictions
- - - - Firms may earn profits or losses.
    - - Entry or exit leads to zero economic profit.
- - - - Firm must be a price maker.
    - - Ability to identify different consumer groups.
    - - Prevents arbitrage between buyers.
  - - - Charging each consumer their willingness to pay.
    - - Pricing based on quantity purchased.
    - - Different prices for different consumer groups.
- - - - Incentive to cheat, but mutual cooperation leads to better outcomes.
    - - No player has an incentive to unilaterally change strategy.
  - - - Firms cooperate to restrict output and raise prices.
      - Overt Collusion
      - Tacit Collusion
    - - Firms aggressively undercut each other, leading to temporary efficiency.
- - - - affected by wages, working conditions, leisure preference
    - - affected by goods' prices, worker productivity