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Unformatted text preview: Price Increase Decreases the consumer’s purchasing power, which… …if a normal good, causes the quantity demanded to decrease. …if an inferior good, causes the quantity demanded to increase. Raises the opportunity cost of consuming the good, which causes the quantity of the good demanded to decrease. Characteristic Perfect Competition Monopolistic Competition Oligopoly Monopoly Number of Firms Many Many Few One Type of Product Identical Differentiated Identical or Differentiated Unique Ease of Entry High High Low Entry Blocked Examples of Industry-Wheat-Apples-Selling DVD’s-Restarants-Manufacturing computers-Manufacturing automobiles-First Class Mail Delivery-Tap Water P > ATC, the firm makes a profit P = ATC, the firm breaks even (cost = revenue) P < ATC, the firm experiences losses...
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- Fall '06
- Economics, Quantity Total Revenue, total cost/ quantity, variable cost/ quantity, Fixed Cost/ Quantity