ECO 2023 Study Guide - Midterm Guide: Taipei Metro, Marginal Cost, Natural Monopoly

• School: University of Florida
• Department: Economics
• Course: ECO 2023
• Professor: Mark Rush

Document Summary

Mr =mc maximized profit for all firms. Adverse selection sick people getting insurance. In perfect comp: p < atc eco loss; p > atc eco profit; p = atc normal profit. Frim open: p > avc in perfect comp. Marginal cost rule (monopolies) - p < atc eco loss. Average cost rule (monopolies) - p=atc, dwl. In long run perfect com produces at min atc. Principle: manager; agent: someone who acts on behalf of another person, sales associates. Natural monopoly high fc and low mc.