Paper 1 Flashcards
What are the 6 elasticities
PED
PES
XED
YED
WES
WED
what are the 4 irrational behaviour
Weakness at computation
Information gaps
Habitual behaviour
Influence of others
What are the three market failures
Information gaps/asymmetric information
Under provision of public goods
Externalities
6 Government failure
Information gaps
excess admin cost
policy myopia
regulatory capture
distortion of price signal
Unintended consequences
business objectives 3
Profit maximisation
Revenue maximisation
Sales maximisation
Internal eos (7)
Managerial
financial
risk bearing
marketing/advertising
purchasing
networking
technical
3 External EOS
Education + training
Infrastructure
Agglomerate EOS
DEOS 3
Price of raw materials
Lack of communication between managers
Disharmony of firms
Efficiencies/Inefficiencies (4)
Static efficiencies ( allocative + productive)
Dynamic efficiency (efficiency/time)
Minimum efficiency scale
X-inefficiency (above lrac)
Condition needed for price discrimination (4)?
Distinct PED
Distinct Sub markets
no seepage
High market share
How do you show dynamic efficiency
an fall LRAC
Where is allocative efficiency set
p=mc
AR=mc
where is productive efficiency set
Lowest point of ac
AC = MC
