Menu_14_Mar_11

Menu_14_Mar_11 - TODAYS MENU: Monday 14 March 2011 I....

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TODAY’S MENU: Monday 14 March 2011 I. BUSINESS A. Practice Problems (8, 12,13,14, 16--test) 1. Chapter 15: 1-3, 6-8, 11-14 2. Chapter 16: 1-8, 10, 14, 15 B. Second exam: One week from today II. SUBSTANCE A. Monopoly (price setter; only one who is selling—not only because they can, people are willing and able to pay) Opposite from perfect competition 1. Market structure a. One seller -entire market b. Good with no close substitutes -demand is going to be quite price inelastic --reconsider profit management? c. High barriers to entry -in perfect competition—in small market; but now only one -attract entry -barriers to keep competition out; able to prevent entry i. Causes -copy rights -allowing seller holding patten to be the sole to this method; must be enforced to keep out other firms -exclusive contract -high fixed cost (keep out other firms) relative to variable cost -need distribution network? ii. Implications 2. Firm behavior in the short run positive economic profit, attract entry, barriers keep other sellers out—holding status (will continue into long run because firms cannot enter market) doesn’t guarantee a. How much to produce? -produce where MR=MC
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Menu_14_Mar_11 - TODAYS MENU: Monday 14 March 2011 I....

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