Economic Principles: Analysis of Market Dynamics and Firm Behavior
Economic Principles
Analyzing Production Effects on Income and Input Substitution (Hicks)
X = Y1 + Y2 compensates consumer income to maintain the new price level and initial utility.
Constant Returns to Scale
Scale is excludable and the rivals are faced with proportional increases for all the private factors. Output grows at the same rate.
Fixed Costs and Political Bargaining
If costs are fixed, average variable costs and average total costs, along with votes, determine the majority when deciding. Equal actions are called logrolling.
Demand Curve and Elasticity
A function with a demand curve has demand price elasticity directly related to income. Elasticity is positive (direct, non-rent value). A value of 5 corresponds to a decreasing demand-price relationship. Veblen and Giffen goods are examples.
Cost Curves and Market Competition
The point where the short-run cost curve is the pattern of behavior in each iteration. The marginal cost curve with the average model Bertran variables is established on competition at a lower price than a rival in perfect competition. Minimum operating utilities represent a function of type U = 2X1 + X2, a substitute good.
Cournot Duopoly and Increasing Returns
Cournot’s solution to the duopoly problem in the context of the law of increasing returns means that firms do not change their behavior. The technical optimum coincides with the maximum average performance, depending on the outcome of their marginal yield forecast and the behavior of rivals.
Supply Elasticity and Monopolistic Competition
The elasticity of supply function (ceteris paribus) and the theorem of excess capacity in monopolistic competition will be between 0 and +? if the function is linear with a positive slope. It is a property of long-run equilibrium in this market rate where average costs are less than marginal costs. An increase in the quantity produced will increase the average costs.
Demand Homogeneity and Consumer Preferences
If a company selling cereal for breakfast asks about demand functions being homogeneous, having 4 different types equidistant to zero in price and income indicates the sale of consumer preferences to changes in price and income in proportion as the consumer does not alter.
Demand Curve and Market Competition
Long-run equidistributed circumference demand. How many and what type of variety would have to introduce a demand curve facing the industry? Competitors for perfect half of the competition is market? Decreasing. Four intermediate varieties.
Supply Curve and Majority Voting
That the supply curve bends towards working there. The situation in which a vote implies majority (democracy) that does not result from a wage level; further increases of the same reduce labor supply. (Necessarily) a decision-making consistent in terms of economic theory. Companies are price-denominational bidders. The price paradox is called the number that produce.
Marginal Utility and Bilateral Monopoly
The law of marginal utility weighted balance is the solution of bilateral monopoly. Is satisfied where the solutions will be indeterminate between theoretical limits of monopoly and monopsony. Could not increase utility costs by reallocating it from another.
Spider Web Model and Market Dynamics
In a spider web market, the marginal costs are always one company. The offer price is referred to the anterior equal period to average variable costs and average total (a delay) in their respective minimum.
Contestable Markets and Entry Barriers
A contestable market or dispute the average cost curve variable term. Free exit means that the entry of companies from increasing their minimum because it is supposed to be created from the no sunken costs incurred (sunk-cost) or irrecoverable-inefficiencies, biodegradable or better than you can recover.
Countervailing Power (Galbraith) and Entry Barriers (Stigler)
Power as defined countervailing Galbraith. The definition of barrier to entry of George Stigler referred to the emergence of countervailing power of unions as they acontrarrestaban the enormous power of multinational advantages of incumbents, against which want to enter the market.
Median Voter Theorem
The median voter theorem affirms that the voting will be preferred that voter.
Marginal Rate of Substitution
The marginal rate of substitution technique is defined as the relationship between physical marginal products.
Expansion Path of a Business
The path of expansion of a business notes the optimal combination of inputs at different levels of outputs.