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3/26 - Good= all the product is gaurenteed to sell New...

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3/26/08 Revenue The pattern linking revenue and output is dependent upon what type of industry is being analyzed. In particular, dependent upon how much competition there is. *Industry structures/ market structures- aligopily- small number of competitors duopoly- 2 firms and so on Perfect Competition is characterized by 1) uncountablely large number of sellers 2) identical product 3) costless entry and exit *Code word examples: Anything Agricultural That’s good/bad news proposition Bad= farmer cannot charge more than the price is set at=”price taker”
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Unformatted text preview: Good= all the product is gaurenteed to sell New Terms TR= P x Q MR= Marginal Revenue= change in TR resulting from the last unit of output Q TR MR P 6 6 1 6 6 6 2 12 6 6 3 18 6 6 4 24 6 6 5 30 6 6 6 36 6 6 7 42 6 6 8 48 6 6 In order to measure the individual farmer’s profit, all we need is a way of measuring the total cost “as a rectangle.” ? x Q= TC ?= TC/Q ?=ATC let’s call ATC for by the name “ “ Is this situation sustainable? No, P=0 keeps people who are in,in; and those who are out, out....
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