Chapter 8 and 9 Market Structure

Chapter 8 and 9 Market Structure - Microeconomics...

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1 Microeconomics Principles March 26, 2008 Market Structure & Competition REMEMBER! We will be using many of the graphs from previous chapters! z Particularly cost graphs from Chap 8 z Come to Econ lab if you want help [305 Stevens Hall] Homework Due Tonight Today’s Outline Chap 9 (pgs. 166-173) z Introduce four models of market structure z Pure competition z Making Decisions in the Short Run (for competitive firms) z Total Cost/Total Revenue Approach z Marginal Cost/Marginal Revenue Approach
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2 Minimum Efficient Scale (MES) Output Average Total Costs Economies Of Scale Diseconomies Of Scale Long-Run ATC q 1 q 2 q 3 Where is MES here? What size firms would you expect in this market? 1 2 3 4 5 6 7 8 9 10 11 12 13 Alternative Long-Run ATC Shapes Output Long-Run ATC Economies Of Scale Diseconomies Of Scale 1 2 3 4 5 6 7 8 9 10 11 12 13 Where is MES here? What size firms would you expect in this market? Economies of Scale in Real Life: School Consolidation Potential Efficiency Gains from Consolidation of Maine's Educational Resources by Philip A. Trostel ECONOMIES OF SCALE IN EDUCATION : Our schools are too small . We have too many schools and way too many school districts,” Trostel says. “It is costing us a lot of money and draining resources that could be better used to provide instruction.”
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Chapter 8 and 9 Market Structure - Microeconomics...

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