Econ Final Class - Difference between fixed and variable...

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Econ Final Class 14:31 Market Power Employer: if a company has the ability to set wages in towns/markets…if so  restrict employment to drive wages down Employee: a UNION us an organization of workers who try and raise wages  or improve conditions.  Could be done to offset firm market power or  capture  surplus Minimum wage is a price floor in a market Perfect Competition (3, 4, 12, 13 – 15 questions) Market Power (14, 16 – 11 questions) New Material (17, 18, 20 – 9 questions) Binding Restrictions Price floor must be above equilibrium Price ceiling must be below equilibrium
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Unformatted text preview: Difference between fixed and variable costs = short run Shutdown price based on AVC, Profit based on ATC MC Curve = Supply Curve Oligopoly: few firms same market • Duopolists would do best to act like a monopolist • Have incentive to cheat • How firms interact matter Monopolistic Competition: differentiated product • Free entry/exit = zero profits in the long run Externality • MSC does not = MPC • MSB does not = MPB Cap and Trade? • Can be used to allocate any quantity restrictions efficiently Excludable: 14:31 14:31...
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This note was uploaded on 10/04/2011 for the course ECON 201 taught by Professor C.liedholm during the Spring '07 term at Michigan State University.

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Econ Final Class - Difference between fixed and variable...

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