Perfect Competition And Monopoly Flashcards
(42 cards)
Which market classifications have barriers for competition for new sellers?
Monopoly, bilateral monopoly, oligopoly
What are the market classifications?
Perfect competition, monopoly, monopsony, bilateral monopoly, oligopoly, oligopsony, monopolistic competition
Which market classifications have barriers for new buyers?
Monopsony, bilateral monopoly and oligopsony
Which market classifications just have one seller?
Monopoly, bilateral monopoly, and oligopoly has few
Which market classifications have just one buyer?
Monopsony, bilateral monopoly and oligopsony has
Wahab The diferencia en the product in a monopolistic Competition and Perfect Competition?
In monopolistic the product si differentiated
What characteristics are required for a perfect competition?
Perfect Information (customers are able to see the whole information), Price fixed market, many sellers, many buyers and nobody has market power.
What are marginal revenues?
Change in total revenues when we sell one extra unit of product
What’s the formula for maximizing the profit?
MR=MC. At this point you add all the profit and you’ll know you are getting all the juice of it.
Where can we find the minimum average total cost and average variable cost?
Where it crosses with the MC
How do you get Average Fixed Cost?
Dividing the fixed cost by the production where the profit is the maximum (MC=MR)
What does Average Total Cost Includes?
Opportunity cost and costs. (Internal and external costs)
What is economic rent?
Profit made (the difference between total revenue and average total cost)
When the profit is zero…
The market is in perfect competition
When are we in shut down position?
When we can’t cover at least the average variable cost because then we can’t buy the raw material
How does a monopoly maximizes profit?
When mc and mr are almost the same
Why is the revenues line the graph is straight in th emerge to competition and curved in the monopoly?
Because in the perfect competition the price will lead to quantity and in monopoly more variables are added such as demand
If you were a monopoly you would know
The maximum demand of a population
Marginal revenues start at the same point where blank starts
Demand, and finishes at the half of the demand when price is 0
What’s the main problem of capitalism?
Income distribution
In the perfect competition when the price is 50, the marginal revenue is
50
How do you get marginal cost from a function?
You derivative the total cost function
How do you find the lowest price in a perfect competition market at the oint of shut down?
Substituting the function of the average variable cost or marginal cost with the quantity
Does the monopoly have fixed costs?
Normally they do
