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Market Structures : Market Power, Revenues, Monopoly, Oligopoly, Profits,…
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Revenues
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When MC<AC, average cost will fall in the short run
When MC>AC, average cost is increasing
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Monopoly
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High barriers to entry. Monopolist owes its dominance in the market partly to the inability of other firms to enter.
Examples include telephone, water and electricity companies - There is a single supplier involved.
Microsoft corporation has a monopoly in Operating System with roughly 75% of the laptops and desktops running windows.
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Profits
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TR > TC = Supernormal profit, TR = TC = Normal Profit, TR<TC = Loss
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Monopolistic competition
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Product differentiation with respect to quality, services and packaging
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7.1 - Introduction to firms, industries and market structures
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Sum of explicit and implicit costs incurred by a firm for its use of resources, whether purchased or self owned is called economic costs. When economists refer to costs, they mean 'economic costs'.
Short run = The period of time when one factor of production is fixed. Long run = The period of time when all factors of production are variable. Total Costs = All costs incurred by a firm. Marginal cost = Additional cost of producing one additional unit of output
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