ECON 1B03 Chapter Notes - Chapter 6-14: Perfect Competition, Takers, Market Power

• School: McMaster University
• Department: Economics
• Course: ECON 1B03
• Professor: Hannah Holmes

Document Summary

6 & 8 - price controls and taxes. Wasted resources: you may spend a lot of time looking for work. A quota is a quantity control: an upper limit on the quantity of a good that can be sold, the difference between these 2 prices is the quota rent: quota owners receive an additional. In our example, the consumers bore the larger burden of the tax: that"s because the demand curve is actually steeper than the supply curve. Profit = total revenue total cost. Total revenue, tr: the amount a firm receives for the sale of its output. Total cost, tc: the market value of the inputs a firm uses in production. Explicit and implicit costs: a firm"s cost of production include explicit costs and implicit costs, explicit costs are input costs that require a direct outlay of money by the firm (you have a bill for your accountant).