Textbook Notes (363,693)
Canada (158,533)
Economics (800)
ECON 2310 (47)
B Ferguson (11)
Chapter 14

Chapter 14- Equilibrium and Efficiency.pdf

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ECON 2310
B Ferguson

Chapter 14Equilibrium and EfficiencyNovember 4 20131103 AMDefinitionsProduct Homogeneouswhen products are identical in the eye of the purchaserDifferentiatedwhen some purchasers view the products as differentMarket Demandthe sum of the demands of all the individual consumersMarket Demand Curvethe horizontal sum of individual demand curvesMarket Supplythe sum of the supply of all the individual sellersMarket Supply Curvethe horizontal sum of the individual supply curvesFree Entrythere is free entry in a market when technology is freely available to anyone who wishes to start a firm and entry is unrestricted In that case the number of potential firms is unlimitedAggregate Surplusequals consumers total willingness to pay for a good less firms total avoidable cost of production It captures the net benefit created by the production and consumption of the good Deadweight Lossa reduction in aggregate surplus below its maximu
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