This preview has intentionally blurred sections. Sign up to view the full version.View Full Document
Unformatted text preview: Fall 2006: J. Kea Study Guide for Econ 1B (Micro) Final (See study guide for Econ 1B midterm for list of concepts in first part of the course) Monopolistic competition: definition, characteristics • Profit max. rule & profit maximization in short run vs. long run (which does not occur at minimum of ATC curve) • Product differentiation: definition, role of advertising and its pros & cons • Price discrimination: definition and capturing of consumer surpluse Oligopoly: definition, characteristics • Determinants & measures of market power (concentration ratio, Herfindahl-Hirshman Index) • Sources of market power (also applies for monopolies) • Interdependence of oligopolists & models of oligopoly behavior: cartels & open collusion, tacit/covert collusion, price leadership, cutthroat competition & kinked demand curve • Using profit maximization rule leads to “sticky” prices and use of advertising Market failures & what society can do to achieve optimal outcome: definition of market failure...
View Full Document
This note was uploaded on 04/27/2010 for the course ECON 1B taught by Professor Jamie during the Spring '06 term at West Valley.
- Spring '06
- Monopolistic Competition