micro econ Essay

Submitted By lexsmells
Words: 610
Pages: 3
Open Document
MC is the slope of the line tangent to the TC Curve at the point (Q, TC(Q)). MC is the derivative of the TC with respect to Q, and the derivative is the slope of the tangent line.
• Demand Substitute: When price of X falls, Demand of Y falls
• Demand Complement: Price of X falls, the demand for Y increases o Printer and ink
• Shifting of the DEMAND and SUPPLY curve o Shift of the Supply Curve: When the cost of production changes.
• Better technology, change of input costs
• With a price increase, if the supply goes down it is likely coming from a supply shock
• Estimating Demand curves: Looks at historical data, data from similar products (break it down to components), randomized experiments, Consumer Surveys, Secondary (resale) market, actions).
• Consumer Surplus: Of those customers who bought the item, the difference between what the total group was willing to pay verse what the group of consumers actually ended up paying.
• Price ceilings and floors o Price Ceiling example: Rent Control (this creates an excess of demand) o Price Floor example: Minimum wage (this creates an excess supply)
• Price Discrimination: Charging different prices to different customers or charging different prices to an individual for each unit that the customer purchases. (ASSUMPTION: Very difficult for consumer to resell the product)
• To be successful, the firms must have monopoly pricing power. o Perfect Price Discrimination
• 1st degree: Where each consumer will pay max amount they are willing to pay. o If every consumer is charged exactly her willingness to pay for each incremental unit.
• i.e. Secondary markets, street vendors, fin aid, actions o Imperfect Price Discrimination: Occurs when there are groups of consumers that have different demand curves for a good on average.
• 3rd degree (You don’t have to worry about people changing): A situation where a company sells to different verifiable groups of people, where the two groups have different demand for the good.
• Differentiating between locals and non-locals, students, senior citizens, etc.
• MR(group A)=MR (group B) when there is a constant MC
• Example: MC=0, Q(S)=200-4P; Q(NS)=200-2P; Q(TOTAL)=Q(S)+Q(NS)=400-6P=Market demand curve o If a monopolist can’t charge different prices, solve for monopoly via market demand curve. o If
Show More

Related Documents: micro econ Essay

Week 2 Macro individual paper

The Fundamentals of Macroeconomics ECON 372 March 10, 2014 Mr. Cain The Fundamentals of Macroeconomics Introduction into the Fundamentals of Macroeconomics It is the idea that considers the lack of interest there is in the economy dating back to the early 1900's. The economy over time was studied by scholars that made terms that better deal with our economy that developed the meaning of Micro/Macroeconomics. Currently macroeconomics deals with GDP (gross domestic product) that everyone faces…

Words 741 - Pages 3

Essay on Economics: Supply and Demand and Demand

Price Elasticity of Demand Report Introduction to Microeconomics/ECO102 March 25, 2013 Price Elasticity of Demand This paper will discuss about price elasticity of demand and factors that affect price elasticity of demand. Elasticity can be described as a measure of the sensitivity of demand for goods or merchandise to changes in price. Price elasticity determines how much of an impact a change in goods or services price will have on the…

Words 830 - Pages 4

Ebola and the Liberian Economy2 Essay

Article Analysis for Week 3 Cynnise Johnson – Lyles Economics for the Information Age ECON/103 October 19, 2014 Professor Brian W. Sloboda Due to the recent Ebola outbreaks, the Liberian economy has begun to quickly fall. The Liberian people’s fears are being realized, and there is little they can do. Liberia was hit hardest by the Ebola outbreak, and because of it the Liberian people are being forced to take drastic measures to survive. The Ebola outbreak in Liberia has arrived with devastating…

Words 830 - Pages 4

Principles of Micro Economics Question Paper

Course Title: Principles of Economics – Micro Course Code: ECON 201 Homework # 3 Question # 1 (10 points) a) What is cross-price elasticity? The percentage change in the quantity of one good that is demanded as a result of percentage change of another good. _________________ When cross-price elasticity has a positive sign what does that imply? That the price of good B went up, causing the quantity demanded for good A to increase.…

Words 978 - Pages 4

Essay Social Problems

ability to look beyond the individual as the cause for success and failure and see how one’s society influences the outcome (by C. Wright Mills) • Is the person homeless because of the economy (macro – large scale point of view) or drug addiction (micro – small scale reference)? • When people see the problems as personal, all they can do is try to deal with their troubles as one individual • SI transforms personal troubles into social issues – affect not only us also countless people like us Objective…

Words 1333 - Pages 6

Observation And Analysis Of The Class Videos

Adeela Wilson ECON 101 Mr. Cleveland 25, March 2014 Observation and Analysis of the Class Videos As we all know there are many government issues that are affecting the US economy. There are several discussions presented through social network and media. I would like to address two videos that were viewed. The first video is about Robert Reich in support of government spending. In the video, Reich is being interviewed about his viewpoints about budget cuts and how it could make job crisis worse…

Words 1068 - Pages 5

Microeconomics And The Laws Of Supply And Demand

Microeconomics and the Laws of Supply and Demand XXXXXXXXX ECO/365 Microeconomics and the Laws of Supply and Demand In the world of business, flexibility is the key to success. Businesses must be able to change with the demands of the customer. Our economy is based off supply and demand of goods and services. As Colander states in our text, “Prices are the tool by which the market coordinates individuals’ desires and limits how much people demand. When goods become scarce, the market reduces…

Words 1195 - Pages 5

Essay on Per Capita GDP

Production Possibilities Curve Introduction The production possibility curve results from graphing the efficient combinations of output for an economy that is using its factors of production at their full potential, allocating its resources in the best possible way. The slope of the production possibility curve is always negative when production is at its full potential because to increase output of one product, resources must be allocated away from another product, forcing the economy to forego…

Words 1270 - Pages 6

Principles Of Microeconomics

Fall 2013 AUG 26 - Dec 15 Econ 001: Principles of Economics I (Microeconomics) Section 0903, 3 Units I Required Text The required text for the course is Econ Micro 3rd Edtion William A. McEachern. (South-Western Cengage Learning). ISBN: 978-1-111-82224-8 Course Advisories: English 020A COURSE OUTLINE Course Description: This introductory microeconomics course provides an understanding of basic economic principles and forces, which govern the production, and distribution…

Words 2055 - Pages 9

Social Security Essay example

Social Security Kelsey Medina Econ 6th 02/09/15 Introduction For my economics paper I am going to be writing about the pros and cons of social security. In today’s economy social security is either getting abused or being benefited towards someone who needs it and there is no way of telling which one is true. Social security is a way for people to be able to live and it is also a way to get free money. The government is setting their qualifications low and many people can easily qualify for…

Words 1627 - Pages 7