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Microeconomics 1110 ch 9, 10 and 11.docx

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Langara College
ECON 1110

Microeconomics 1110 Ch. 9 Revenues Out cost curves remain the same, but different types of markets have different revenue structures. Consider an industry, which is perfectly competitive  Many buyers and sellers  Homogenous product  No barriers to entry or exit  Price takers  No firm in industry is large enough to change the production price by changing output so firms are small Revenue Fnc under Perfect Comp TR= PxQ AR=TR/Q MR=change in TR/ change in Q Ch. 10 So, in the longer term, perfect competition firms tend to break even. Of course, things would be different if the firm was a monopoly  One seller in market  Firm is the industry  Barriers to entry and exit  Price setter  Firm can set price but must accept the fact that QtyD will adjust accordingly to new price Creative Destruction by Joseph Schumpeter Creative in the sense that new products were being invented, destruction b/c people would eventually get around the barriers to entry and monopoly will break down Natural Monopolies This is an industry
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