ECON 208 Lecture Notes - Marginal Revenue, Market Power, Competitive Equilibrium

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ECON 208 Full Course Notes
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ECON 208 Full Course Notes
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Document Summary

A market is said to have a competitive structure when its firms have little or no market power. The more market power the firms have, the less competitive is the market structure. Firms: max profit = total revenue total costs. Individual firm demand curve industry demand curve. From the industry demand curve we can infer firm"s demand curve. The competitiveness of a market: the influence that individual firms have on market prices. The less power an individual firm has, the more competitive is the structure of the market. Zero market power: extreme form, perfectly competitive market, firms able to sell as much as they want at the prevailing price. Chapter 9: competitive markets: firms are free to exit and enter the industry. Total revenue: total receipts from the sale of a product. Average revenue: total revenue divided by the quantity sold (p * q)/p.

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