ECON 2000 1st Edition Lecture 16Outline of Last Lecture VII. Marginal reasoninga. Compares marginal benefit with marginal costb. MarginalVIII. Total Reasoning vs. Marginal Reasoninga. ExampleIX. Goal of firms is to maximize profita. Profit= Total Revenue – Total Costb. 2 variable for firmsX. Choosing pricea. Depends on market structureb. Perfect Competitionc. MonopolyXI. Choosing Quantitya. Engages in marginal reasoningb. Compares marginal Revenue with Marginal CostXII. Total Costa. Fixed costb. Variable CostXIII. Law of Decreasing Returnsc. DefinitionOutline of Current LectureXIV. Price Elasticity of Demanda. Law of Demandb. Buyer behaviorsc. Definitiond. Equation These notes represent a detailed interpretation of the professor’s lecture. GradeBuddy is best used as a supplement to your own notes, not as a substitute.e. Factors that Influences Price of EdCurrent LectureXIV. Price Elasticity of Demanda. Law of Demandi. Price goes up, Quantity goes downii. Price goes down, Quantity goes upb. Buying behaviorsi. If price changes and buyers respond drastically: Elasticii. If price changes and buyers respond only a little: inelasticc. Definitioni. Tells us how much quantity demand changes with respects in changes in priced. Equation i. ii. Formula > 1 = Elasticiii. Formula < 1 = Inelasticiv. Formula = 1 = unitary elasticitye. Factors that Influences Price of Dsi. Levels of Incomeii. Strength of preferenceiii. Need vs. Wantiv. # of
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