ECO101H1 Lecture Notes - Lecture 11: Movie Review Query Engine, Marginal Revenue, Wwwq

• School: UTSG
• Department: Economics
• Course: ECO101H1
• Professor: Robert Gazzale

Document Summary

Term test 2 study guide: the monopolist (constrained to charging a single price) Market failure: the big picture: market failure: a situatio(cid:374) i(cid:374) (cid:449)hi(cid:272)h a (cid:862)f(cid:396)ee(cid:863) (cid:373)a(cid:396)ket is i(cid:374)effi(cid:272)ie(cid:374)t (cid:894)i. e. total su(cid:396)plus is not maximized) Identify situations in which market intervention is unwarranted (not authorized/justified) Market participants are willing and able to correct failure. Surplus out there out for grabs, firms have incentive on figuring how to. You face a downward sloping demand curve for your product. You face a p and q tradeoff. Not fa(cid:396)(cid:373)e(cid:396)s (cid:449)heat: (cid:374)ot do(cid:449)(cid:374)(cid:449)a(cid:396)d slopi(cid:374)g, it is elasti(cid:272) demand (e. g. of perfect competition) (cid:1006)(cid:895) the a(cid:272)tio(cid:374)s of (cid:455)ou(cid:396) (cid:862)(cid:272)o(cid:373)petito(cid:396)s(cid:863) does (cid:374)ot (cid:894)app(cid:396)e(cid:272)ia(cid:271)l(cid:455): to a(cid:374) app(cid:396)e(cid:272)ia(cid:271)le extent) affect the demand curve for your product. (cid:1011) (cid:455)ea(cid:396)s ago, apple i(cid:374)(cid:272) (cid:449)as a (cid:373)o(cid:374)opol(cid:455), (cid:374)o(cid:449) apple"s de(cid:373)a(cid:374)d curve depends on samsung/androids. Barriers to entry: co(cid:374)trol of a s(cid:272)ar(cid:272)e resour(cid:272)e (cid:894)i. e. all fir(cid:373)s (cid:272)a(cid:374)(cid:374)ot (cid:272)hoose the (cid:862)(cid:271)est(cid:863) atc(cid:895, natural resource.