23256448
Description
Flashcards by Sophia Lynch, updated more than 1 year ago
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Created by Sophia Lynch
almost 4 years ago
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| Question | Answer |
| Why may the long-run supply be upward-sloping? (2) | 1. Some resources used in previous production may only be available in small quantities. 2. Firms may have different costs |
| What is a 'Marginal Firm'? | The firm that would exit the market if price were to decrease any further. |
| In the long-run... | Economies of Scale is always met. |
| Give an example of a firm that is a 'price maker' | A monopoly firm. (Competitive firms are given a price.) |
| What are the characteristics of a 'monopoly firm'? (2) | 1. Sole seller of it's products 2. It has no close substitutes |
| Why are the barriers to entry so high for monopolistic firms? (3) | 1. They may own a key resource 2. They may have exclusive production rights from the government 3. Has production costs much lower than smaller businesses |
| What are the three main differences between monopoly verses competition? | |
| A monopoly increasing sales has two effects on total revenue (TR)... | 1. The Output Effect - (more output is sold so TR is higher) 2. The Price Effect - (price falls so TR is lower) |
| At what point does a monopoly maximise it's profit? | When MR = MC. |
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