ECON 1 Lecture Notes - Lecture 15: Marginal Cost, Monopolistic Competition, Productive Efficiency
3 Dec 2020
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Document Summary
Diminishing returns, production costs, and product supply: Changes in supply factor prices of variable inputs or in technology will alter costs and shift the marginal cost or short run supply curve to a new location. The total market is the total of the supply schedule of the industry firms. The total revenue (tr) = the q of each firm x price. Pure monopoly is a market structure in which one firm is the sole seller of a product or service for example a utility. Monopolistic competition is characterized by a relatively large number of sellers producing differentiated products. Product differentiation- firm distinguishes its product on the basis of workmanship or design. Oligopoly- involves only a few sellers of a standardized or differentiated product so each firm is affected by the decisions of its rivals and must take those decisions into account in determining its own price and output.
