Microeconomics, Perfect Competition
1. Perfectly competitive firm cannot affect the market price Because all the products sold in the market are identical–any rise in price leads to loss of customers Because there are many buyers and sellers- so the firm isn’t the only firm which sells that...
Current Economics, Microeconomics
Everyday in our live we get to see something , somewhere and somehow related to Economics. Think about the cup of coffee your are having every morning, or the amount of sugar you are adding. About the telephone service you are using or internet package that enables me...
Consumer Choice, Income and Substitution Effect, Microeconomics
Whenever policy makers want to measure the impact of a change in prices on consumers, welfare analysis comes into play. Given that reforms adopted can either create or destroy value, an assessment is needed of whether the measure taken will increase or decrease the...
Microeconomics, Monopoly, Monopoly Output Decision
The output decisions in case of monopoly differ in respects of the time period or the length of time span through the monopoly firm is operating. There are two kinds of time periods; i. Short Run: It is a time period in which one of the variable is fixed i.e could not...
Kinked Demand Demand Theory, Oligopoly
Forms of Oligopoly There are two forms of oligopoly structure; i. Collusive Oligopoly: In such oligopoly few firms unite together through a formal or informal agreement. The example for formal agreement is cartels and the example for informal agreement is price...
Microeconomics, Monopoly, Monopoly Inefficiency
The economic inefficiencies of monopoly can also be regarded as demerits or disadvantages of monopoly. Monopoly is definitely a harmful element of an economy as a single firm rules over the economy and sets the prices of commodity, which has no substitute in the...
Cartel Theory, Microeconomics, Oligopoly
Background Oligopoly is the kind of market structure in function in which few firms, nearly from three to fifteen or more firms compete with each other for homogeneous products on the basis of product differentiation. If the products are homogeneous then it is called...
Microeconomics, Monopolistic Competition
Definition Monopolistic competition is a type of market structure characterized by a large number of firms or producers competing to produce a great variety of similar products that they constantly try to differentiate. In monopolistic competition there are many...
Microeconomics, Perfect Competition, Profit Maximization in Short-Run
There is a very basic concept of understanding Profit maximization either for Perfect Competition or another market model. For almost all markets, the concept is similar. Total Revenue If Q is output of the firm, Total Revenue is : Total Revenue = Price x...
Microeconomics, Oligopoly
Microeconomics · Market Structure · Complete Pillar Guide No perfectly competitive market has ever existed. Every one of its assumptions is false. It is nonetheless the single most important model in economics — because it is the only market structure in which the...
