Midterm 2 Topics

Midterm 2 Topics - Announcement s Exam Fr iday Office hour...

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Announcements Exam Friday Office hours Thursday 2-4pm or by appt. There will be a Homework for ch 15 due Monday
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Firms, production and costs (ch7) Firms maximize profits (TR-TC) Accounting vs. economic costs (implicit and explicit) Costs (TC, FC, VC, AFC, AVC, ATC, MC ) Know how all the costs relate to each other (e.g. TC=FC+VC, MC=change in TC/change in Q, MC hits AC at minimum, etc. Marginal Product, average product Technologies and input costs isocosts and isoquants
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Short Run Costs 3 of 31
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4 of 38 MONOPOLISTIC COMPETITION AND OLIGOPOLY Characteristics of Different Market Organizations
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Perfect Competition (ch8) 1. “price takers”. 2. Homogeneous products. 3. Everyone has access to full information. 4. Unrestricted entry and exit to the market 5. Prices not fixed or regulated by the state Be familiar with “picture” of the firm. Flat demands curve for individual firm P=MC (MR=MC) gives profit – maximizing quantity (also gives us the firm’s supply curve) P=MC is efficient from society’s standpoint long-run competitive equilibrium When P = SRMC = SRAC = LRAC and profits are zero.
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Maximizing Profits when Price = $10 q P d=MR=AR=P AC MC 20 $10 $6.00 Max Profit $5.00 15 Perfect competition
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This note was uploaded on 06/21/2009 for the course ECON 2005 taught by Professor Zirkle during the Fall '07 term at Virginia Tech.

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Midterm 2 Topics - Announcement s Exam Fr iday Office hour...

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