Menu_28_Feb_11

Menu_28_Feb_11 - Firm behavior in the short run: How much...

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TODAY’S MENU: Monday 28 February 2011 I. BUSINESS A. Practice Problems 1. Chapter 14: 1-5, 7, 8, 10, 11, 13-15, 20 B. Second exam: Three weeks from today (21 March) II. SUBSTANCE A. Theory of the Firm: The Basics 1. Costs a. Average/Marginal cost relationship b. Examples 2. Time a. Short run i. Definition b. Long run i. Definition B. Perfect competition 1. Market structure a. Many small buyers and sellers b. Homogeneous good c. Perfect information d. No barriers to entry/exit 2.
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Unformatted text preview: Firm behavior in the short run: How much to produce? a. Case 1: P > ATC i. Equilibrium quantity ii. Profit b. Case 2: P = ATC i. Equilibrium quantity ii. Profit c. Case 3: ATC > P AVC i. Equilibrium quantity ii. Profit d. Case 4: P < AVC i. Equilibrium quantity ii. Profit e. Conclusions 3. Graphically III. NEXT TIME A. Finish Chapter 14: Perfect Competition B. Begin Chapter 15: Monopoly...
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