5 Steps to a 5 AP Microeconomics, 2014-2015 Edition

120 › Step 4. Review the Knowledge You Need to Score High Short-Run Profit and Loss To maximize profit, the firm must choose the ...

Market Structures, Perfect Competition, Monopoly, and Things Between ‹ 121 they were fine. Whenever they ignored these cautionar ...

122 › Step 4. Review the Knowledge You Need to Score High Decision to Shut Down Firms obviously do not enjoy producing at a loss ...

Market Structures, Perfect Competition, Monopoly, and Things Between ‹ 123 Short-Run Supply As you can see in Figure 9.5, when t ...

124 › Step 4. Review the Knowledge You Need to Score High P=MR =MC =ATC, each carrot farmer is now breaking even with P=0. Would ...

Market Structures, Perfect Competition, Monopoly, and Things Between ‹ 125 What’s So Great About Breaking Even? Remember there i ...

126 › Step 4. Review the Knowledge You Need to Score High Summarizing in Table 9.5, there are four possible short-run scenarios ...

Market Structures, Perfect Competition, Monopoly, and Things Between ‹ 127 A decreasing cost industryis one in which the entry o ...

128 › Step 4. Review the Knowledge You Need to Score High producer of granulated sugar wanted to monopolize the market, the firm ...

Profit Maximization While demand looks different for the monopolist, the mechanism for maximizing profit is the same for both th ...

Efficiency Analysis We refer to efficiency in a couple of different sections of this book, and now that we have compared perfect ...

Allocative efficiency exists because Pc=MR =MC at Qc, and productive efficiency exists because firms produce at minimum ATC, onc ...

9.3 Monopolistic Competition Main Topics: Structural Characteristics, Short-Run Profit Maximization, Long-Run Adjustment Structu ...

Long-Run Adjustment With easy entry and exit into the monopolistically competitive industry, short-run positive profits like tho ...

9.4 Oligopoly Main Topics: Structural Characteristics, Industry Concentration, Game Theory and the Prisoners’ Dilemma, Collusive ...

not the other, she can reward the confessor with a B. The professor brings both students, one at a time, into her office and giv ...

Use of the previous game matrices assumes that both players in the game make simul- taneous choices. Many games involve a series ...

Punishment mechanism. If the cartel can restrict output and increase the price above the current competitive level, cartel memb ...

› Answers and Explanations 138 › Step 4. Review the Knowledge You Need to Score High A—The firm only operates if the total reve ...

Market power: The ability to set the price above the perfectly competitive level. Natural monopoly:The case where economies of s ...