AP Micro 16 by Savannah Julius https://padlet.com/8juliuss/apmicro16 Monopolistic Competition en-us 2018-03-15 23:29:44 UTC 2025-03-21 23:33:38 UTC hello@padlet.com https://padlet-assets.s3.amazonaws.com/icons/Lovecoffee.png Quizlet 8juliuss https://padlet.com/8juliuss/apmicro16/wish/242627926 https://quizlet.com/_4ky6im]]> 2018-03-15 23:31:15 UTC https://padlet.com/8juliuss/apmicro16/wish/242627926 Frequent Errors 8juliuss https://padlet.com/8juliuss/apmicro16/wish/242627968 https://docs.google.com/document/d/1gPMKkm2ZO4VA7WyI2chmFCM8MVdwuGhroNUvpthhTi8/edit]]> 2018-03-15 23:31:37 UTC https://padlet.com/8juliuss/apmicro16/wish/242627968 between monopoly and competition 8juliuss https://padlet.com/8juliuss/apmicro16/wish/242664412 competition
  •  P = MC
  • entry and exit
  • long run P = min ATC
  • many firms
  • price takers

monopolistic
  • P > MC
  • barriers to entry
  • DWL w/ positive economic
  • one firm
  • price makers
]]> 2018-03-16 03:38:25 UTC https://padlet.com/8juliuss/apmicro16/wish/242664412 imperfect competition 8juliuss https://padlet.com/8juliuss/apmicro16/wish/242664609 oligopoly
monopolistic competition]]> 2018-03-16 03:39:43 UTC https://padlet.com/8juliuss/apmicro16/wish/242664609 oligopoly 8juliuss https://padlet.com/8juliuss/apmicro16/wish/242664665 cereal, laundry equipment, cigarettes]]> 2018-03-16 03:40:09 UTC https://padlet.com/8juliuss/apmicro16/wish/242664665 monopolistic competition 8juliuss https://padlet.com/8juliuss/apmicro16/wish/242664716
  • many sellers
  • product differentiation
    • downward sloping demand curve
  • free entry and exit
    • long run economic profit of zero
  • price makers

    • books, restaurants, cookies... most things!
    ]]>     2018-03-16 03:40:30 UTC https://padlet.com/8juliuss/apmicro16/wish/242664716     an oligopoly is not perfect competition because of the number of sellers is WRONG 8juliuss https://padlet.com/8juliuss/apmicro16/wish/242664845 2018-03-16 03:41:36 UTC https://padlet.com/8juliuss/apmicro16/wish/242664845 monopolistic competition is not perfect competition because the products are differentiated 8juliuss https://padlet.com/8juliuss/apmicro16/wish/242664873 2018-03-16 03:41:53 UTC https://padlet.com/8juliuss/apmicro16/wish/242664873 Monopolistic Competitive Firm in the Short Run 8juliuss https://padlet.com/8juliuss/apmicro16/wish/242665552
  • downward sloping demand curve
  • MR = MC up to D for profit-max

    • SAME AS MONOPOLY GRAPHS FOR PROFIT AND LOSSES
    ]]>     2018-03-16 03:46:31 UTC https://padlet.com/8juliuss/apmicro16/wish/242665552     Long Run Equilibrium 8juliuss https://padlet.com/8juliuss/apmicro16/wish/242665676 short run profits --> entry --> demand shifts left --> profits decrease --> economic profit goes to zero

    short run losses --> exit --> demand shifts right --> loss decreases --> economic profits go to zero

    **long-run demand is TANGENT to the declining portion of ATC (not at min ATC)**]]>     2018-03-16 03:47:35 UTC https://padlet.com/8juliuss/apmicro16/wish/242665676     Monopolistic v. Perfect Competition 8juliuss https://padlet.com/8juliuss/apmicro16/wish/242666000 1. excess capacity
     - difference between profit max Q and efficient scale Q
         - firms don't produce here because not as high of profit
    2. markup
    - difference between price and marginal cost (P > MC)]]>     2018-03-16 03:49:36 UTC https://padlet.com/8juliuss/apmicro16/wish/242666000     Monopolistic Competition and Welfare in Society 8juliuss https://padlet.com/8juliuss/apmicro16/wish/242666185 source of inefficiency = markup!
     --> deadweight loss

    source of inefficiency = number of firms may not be ideal]]>     2018-03-16 03:51:20 UTC https://padlet.com/8juliuss/apmicro16/wish/242666185     externalities 8juliuss https://padlet.com/8juliuss/apmicro16/wish/242666249 product-variety externality: increase in CS
    business stealing externality: lose customers

    total surplus is NOT maximized]]>     2018-03-16 03:52:04 UTC https://padlet.com/8juliuss/apmicro16/wish/242666249     what they spend 8juliuss https://padlet.com/8juliuss/apmicro16/wish/242666344 highly differentiated products: spend 10-20% on advertising

    industrial products: very little

    homogeneous products: none]]>     2018-03-16 03:52:56 UTC https://padlet.com/8juliuss/apmicro16/wish/242666344     Debate Over Advertising 8juliuss https://padlet.com/8juliuss/apmicro16/wish/242666414 Critics:
    • manipulates tastes
    • impedes competition
    • no information
    • more inelastic demand

    Defenders:
    • provides information to customers (prices, existence, location)
    • fosters competition
    • more elastic demand curve
    ]]>     2018-03-16 03:53:41 UTC https://padlet.com/8juliuss/apmicro16/wish/242666414     Advertising as a Signal of Quality 8juliuss https://padlet.com/8juliuss/apmicro16/wish/242666620 even if ad doesn't really explain product...

    The extensive amount of CA$H spent on ads can give insight to the high quality of the product]]>     2018-03-16 03:55:32 UTC https://padlet.com/8juliuss/apmicro16/wish/242666620     Brand Names 8juliuss https://padlet.com/8juliuss/apmicro16/wish/242666668  - spend more on advertising so their prices are slightly higher

    brand names are useful!
    1. information on quality (name recognition)
    2. firm has incentive maintain quality (reputation)]]>     2018-03-16 03:55:54 UTC https://padlet.com/8juliuss/apmicro16/wish/242666668