BUSINESS ECONOMICS
MONOPSONY: Many sellers, One buyer
DUOPSONY : Many sellers, Two buyers
OLIGOPSPONY: Many sellers, few buyers
MONOPOLY: One seller, Many buyers
DUOPOLY: Two sellers, Many buyers
OLIOPOLY : Many sellers, Different products
PERFECT COMPETITION or PURE COMPETITION:All firms sell identical products, All firms are price takers, All firms have relatively small market share, Freedom to entry and freedom to exit
Demand curve in monopolistically competitive firm is elastic
Incremental cost
Opportunity cost
Baumd's model of growth maximization
Engel Curve: Change in quantity demanded when income of the consumer changes
Law of diminishing marginal utility: As consumer consumes more and more units of a specific commodity, the utility from the successive units goes on diminishing
H.Gossen, a German economist was first explain this law in 1854
Using the cardinal approach, economists assume consumers' "happiness," preferences, or utility can be expressed by some function U(x), where x is a vector of goods (consumption, investment, etc.). Generally, U is increasing in x, meaning the more of x that a consumer consumes, the happier the consumer will be. Therefore, if given the opportunity, the consumer will consume without bounds.
Perfectly inelastic demand curve: When price increases there is no change in demand
Price elasticity of demand is Zero
Monopoly: Inelastic demand curve
Monopolistic: Highly elastic
Perfect competition: Perfectly elastic
Perfect competition:
Large buyers and sellers
Identified product
Complete freedom from entry and exit
No firm earns above normal profit in the long run
Perfect knowledge about the market
ISOQUANT: The Isoquant curve contains all combinations of 2 inputs that produce the same total output.
DUOPSONY : Many sellers, Two buyers
OLIGOPSPONY: Many sellers, few buyers
MONOPOLY: One seller, Many buyers
DUOPOLY: Two sellers, Many buyers
OLIOPOLY : Many sellers, Different products
PERFECT COMPETITION or PURE COMPETITION:All firms sell identical products, All firms are price takers, All firms have relatively small market share, Freedom to entry and freedom to exit
Demand curve in monopolistically competitive firm is elastic
Incremental cost
Opportunity cost
Baumd's model of growth maximization
Engel Curve: Change in quantity demanded when income of the consumer changes
Law of diminishing marginal utility: As consumer consumes more and more units of a specific commodity, the utility from the successive units goes on diminishing
H.Gossen, a German economist was first explain this law in 1854
Using the cardinal approach, economists assume consumers' "happiness," preferences, or utility can be expressed by some function U(x), where x is a vector of goods (consumption, investment, etc.). Generally, U is increasing in x, meaning the more of x that a consumer consumes, the happier the consumer will be. Therefore, if given the opportunity, the consumer will consume without bounds.
A giffen good
is a type of inferior good (a good that people buy more of when their income goes down). Giffen goods are goods that are substitutes for a more expensive good, that people buy more of when they cannot afford a superior good. The classic example of a giffen good is bread for the very poor. If their income falls, they will stop buying luxuries such as meat, and will buy more bread instead to fill themselves up. The demand for bread falls because people have less money to spend on itA veblen good
is a good that people buy because it is expensive, as a show of wealth. Therefore it is a superior good with respect to income, but if the price falls, less of the good will be demanded.Perfectly inelastic demand curve: When price increases there is no change in demand
Price elasticity of demand is Zero
Monopoly: Inelastic demand curve
Monopolistic: Highly elastic
Perfect competition: Perfectly elastic
Perfect competition:
Large buyers and sellers
Identified product
Complete freedom from entry and exit
No firm earns above normal profit in the long run
Perfect knowledge about the market
ISOQUANT: The Isoquant curve contains all combinations of 2 inputs that produce the same total output.
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