Menu_16_Mar_11

Menu_16_Mar_11 - TODAYS MENU Wednesday 16 March 2011 I...

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TODAY’S MENU: Wednesday 16 March 2011 I. BUSINESS A. Practice Problems 1. Chapter 16: 1-8, 10, 14, 15 B. Second exam: Next time II. SUBSTANCE A. Monopolistic competition 1. Market structure a. Many small buyers and sellers i. Implications b. Slightly differentiated goods -location is a good way to differentiates from else where i. Causes ii. Implications c. No barriers to entry/exit i. Implications 2. Firm behavior in the short run -anything can happen in this market -price can be greater than average total cost (firm is earning positive economic profit) -negative in short run will exit a. How much to produce? b. What price to charge? -MR=MC -highest price people are willing to pay c. Profit? 3. Firm behavior: short run to long run -since there are no barriers, firms are going to respond to incentives -as firms enter market, economic profit goes down; as long as there are positive economic profit firms are going to enter -in the long run economic profit= 0 a. Changes in demand, profit B. Oligopoly
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This note was uploaded on 02/14/2012 for the course ECON 2030 taught by Professor Bong during the Fall '07 term at LSU.

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Menu_16_Mar_11 - TODAYS MENU Wednesday 16 March 2011 I...

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