Review of Part 3 (3 pages)

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Review of Part 3



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Review of Part 3

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This class Clark just went over the new market structures we have learned since the last test. He also touched on private goods and bads again so expect that on the final


Lecture number:
24
Pages:
3
Type:
Lecture Note
School:
The University of Oklahoma
Course:
Econ 1123 - Princ. of Econ-Micro
Edition:
1

Unformatted text preview:

ECON 1123 1st Edition Lecture 24 Outline of Last Lecture I Game Theory A Prisoner s Dilemma B Nash Equilibrium II Summary of Market Structures A Pure Competition B Monopolistic Competition C Oligopoly D Pure Monopoly Outline of Current Lecture I Monopolistic Competition A Short Run B Long Run II Oligopoly A Price Leadership Dominant firm competitive fringe model B Game theory III Pure Monopoly Incurring a loss IV Tax Incidence and subsidy Analysis V Public Goods and Public Bads externalities Current Lecture VI Monopolistic Competition C Short Run in monopolistic competition positive economic profits will cause new entrants to come into the market who are after those profits Firm is making a profit if the ATC curve is below the demand schedule in short run D Long Run In the long run the monopolistic competition model will always have the ATC coming tangent to demand meaning zero economic profit This is because new entrants come in when firms are making positive econ profit 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 VII Oligopoly C Price Leadership Dominant firm competitive fringe model D Game theory VIII Pure Monopoly Incurring a loss Just because a firm is a monopoly does not mean that it is always going to be profitable You still have to look at the demand versus the average total cost to make the product Clark used the example of a rubber frying pan monopoly Sure this monopoly is the only firm selling the product which is why it is a monopoly but that doesn t mean there is a demand for rubber frying pans IX Tax Incidence and subsidy Analysis Incidence Burden You can have legal incidence or economic incidence they are not necessarily related Legal who the tax laws say will pay the tax Importance if the law says sellers will pay the tax supply shifts up left If the law says buyers pay the tax demand shifts down Typically depending on the elasticity of supply



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