ECON 1 Lecture Notes - Lecture 16: Marginal Cost, Marginal Revenue, Oligopoly

12 views3 pages

Document Summary

Consumer surplus- the difference between the maximum prices that consumers are willing to pay for a product and the market price of the product. Producer surplus- the difference between the minimum prices that producers are willing to accept for a product and the market price of the product. The competitive market has the ability to restore the efficiency when change in consumer taste, supplies or technology will automatically set in motions the appropriate realignments of resources. These adjustments cause producers to reallocate resources until supply is such that price equals marginal cost. The innovations firms achieve thanks to competition are considered by economists to be the driving force behind economic growth and rising living standards. Creative destruction-are the transformative effects of competition that captures the idea that the creation of new products and production methods destroys the market positions of firms committed to existing products and old ways of doing business.

Get access

Grade+20% off
$8 USD/m$10 USD/m
Billed $96 USD annually
Grade+
Homework Help
Study Guides
Textbook Solutions
Class Notes
Textbook Notes
Booster Class
40 Verified Answers
Class+
$8 USD/m
Billed $96 USD annually
Class+
Homework Help
Study Guides
Textbook Solutions
Class Notes
Textbook Notes
Booster Class
30 Verified Answers

Related Documents

Related Questions