Micro 18.pdf
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This document contains information about various microeconomics topics including monopoly, price discrimination, marginal cost, marginal revenue, and oligopoly. It discusses concepts such as perfect competition, monopolistic competition, prisoner's dilemma, game theory, and the five competitive forces that determine industry competition and profitability. Several examples of costs, revenues, and demand curves are provided.
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Micro 18.pdf
- 4. Quizmaster
- 6. Riyadh Pizza Company Saudi Style Supreme 0 10 20 30 40 Ali Abdullah Ahmed Faisal Mohammed Mahmood Sultan Turki Monopoly with Price Discrimination Monopoly Marginal Cost 29 Price Marginal Revenue 30 Perfect Competition Price 36
- 7. Riyadh Pizza Company Saudi Style Supreme Marginal Cost 29 0 10 20 30 40 Ali Abdullah Ahmed Faisal Mohammed Mahmood Sultan Turki Price 36 Total Pro fi t 7 x 3 = 21 Monopoly with Coupon Deadweight Loss Charge higher price to increase pro fi ts Price with coupon 36 - 4 = 32 Add Pro fi t 2 x 3 = 6 New Total Pro fi t 21 + 6 = 27 Coupon Price 32
- 9. What is Price Discrimination? Charging each customer the highest price they are willing to pay.
- 10. Name three companies that price discriminate in Laie Movie Theater Restaurants PCC
- 11. Q P Perfect Competition Marginal Cost MC Average Cost ATC Total Cost $ Quantity Pro fi t Demand=MR Total Revenue
- 12. Marginal Cost MC Q P Marginal Revenue MR Monopoly Average Cost ATC Cost $ Q Pro fi t Demand Deadweight Loss Consumer Surplus 1. MR=MC? 2.TR= P x Q 3.TC=ATC x Q 4. Pro fi t =TR-TC or (P-ATC) x Q
- 13. Are any of these fi rms monopolists and why?
- 15. Number Marginal Cost Total Cost Average Cost 1 5 2 4 3 6 4 9 5 16
- 16. Number Marginal Cost Total Cost Average Cost 1 5 5 5 2 4 9 4.5 3 6 15 5 4 9 24 6 5 16 40 8
- 17. Number Marginal Cost Total Cost Average Cost 1 40 2 60 3 90 4 160 5 250
- 18. Number Marginal Cost Total Cost Average Cost 1 40 40 40 2 20 60 30 3 30 90 30 4 70 160 40 5 90 250 50
- 19. Number Marginal Cost Total Cost Average Cost 1 300 2 420 3 600 4 800 5 1500
- 20. Number Marginal Cost Total Cost Average Cost 1 300 300 300 2 540 840 420 3 960 1800 600 4 1400 3200 800 5 4300 7500 1500
- 22. Q $ Monopolistic Competition D MR Short Run Long Run Steep Demand Demand Flattens
- 23. Q $ Short Run Long Run D MR MC ATC Pro fi t Pro fi ts disappear in the long run due to competition High Price Large Quantity Lower Price Lower Quantity QS Q P PS L L Demand Flattens Pro fi t Monopolistic Competition
- 24. D MR MC Competition fl attens the Demand Curve and squeezes pro fi ts. Pro fi ts
- 25. Q $ Market Competition Short Run Demand Short Run Marginal Revenue Long Run Demand Long Run Marginal Revenue Marginal Costs Average Total Costs QSR PSR QLR PLR
- 26. Monopolistic Competition Brand Competition Most firms are in this category Temporary Monopoly
- 27. Continuous Innovation Create Profits Use Profits to Create Repeat
- 28. Strategy Make profits before you lose your monopoly
- 31. Perfect Competition Monopoly Monopolistic Competition Oligopoly Number of Firms Many One Many Few Type of Product Identical Unique Brands Similar Ease of Entry Easy Blocked Easy Hard Demand D = MR D > MR Dynamic Game Theory Examples Commodities Rice Apples Utilities Government Brands Coke Apple STC-Mobily HyperPanda Danube Pairs
- 32. Collusion Dominant Strategy Nash Equilibrium Cooperative Equilibrium Non-cooperative Equilibrium Key Terms
- 34. Oligopoly Cannot use usual methods Demand curves not obvious Complex Strategy
- 35. Oligopoly Don’t know Demand Curve Don’t know Marginal Revenue curve Don’t know where to fi nd pro fi t maximization point
- 37. Prisoner's Dilemma Pursuing the Dominant Strategy Results in Non-Cooperation and Leaves Everyone Worse Off
- 39. John Nash (1928 - 2015 ) Game Theory Nash Equilibrium Nobel 1994 A Beautiful Mind
- 42. Five Competitive Forces Existing Firms Potential Firms Substitutes Buyers Suppliers