Could someone help me summarize how Price is determined under each market type? Competitive, Monopoly, Oligapoly, etc. Thank you! All I could think of now is MR=MC
no matter what the market type, they ALWAYS PRODUCE at the quantity where MC=MR… they price it at the point where this quantity meets DEMAND now, remember, that for perfect comp, D=MR=P
Can anyone explain why a monopoly will likely to expand quantity to the level where ATC=D if a regulatory intervenes to reduce prices?
(PS, draw the graphs, it will help ALOT!) there are two regulatory pricing structures: (remember that monopolies, like any other market structure, PRODUCE at the point where MC=MR) Average Cost Pricing: -they force monopoly to increase production to the point where D=ATC Marginal Cost Pricing -they force monopolies to inrease production to where D=MC
Thanks. I forgot the terms “Average cost pricing” and “Marginal cost pricing”.
remember your cost curves… you’ve got AFC AVC ATC MC Marginal is the one that cuts AVC and ATC at their minimum points… just try to understand that all the grapsh are inter-related