Thursday, April 06, 2006

More Stumpers! :)

1. Explain why the MR facing a competitive firm differs from the MR facing a monopolist.

2. Hey, I never went back to perfect information. What does that mean?

3. Even if PC does not exist, why is it important to the study of microeconomics?

4. Why is the demand curve for a monopolist different from the PC demand curve?


Hmm...I have to go meet your moms & dads. I'll post more tomorrow, and some videos on Monopolies.

See ya!

13 comments:

gorman said...

3. You study the pc to see how efficiently the economy is running. THe pc would be the ideal world. We study it to see how efficiently the real world is running compared to perfect world.

gorman said...

4. I think the demand curve is different because demand on the pc is perfectly elastic whereas the demand curve for the monopolist is less elastic. THe real world doesn't have an infinite number of substitutes so it can't be perfectly elastic.

Reid said...

Well Tyler's on the ball, I think I'll answer these questions later. Hi guys, have a fun spring break and stuff, I know none of you will get this in time, but I have regionals tomorrow in Pewaukee, at the WCTC building, meet starts at 12, 10 dollar admisison, if you want to come. Don't do anything too crazy, like econ or something. Later

Reid said...

Hey guys, I got sixth all around and some others, so I'm representing our region at nationals. So there ya go, see ya later.

The Amazing O-clam said...

2. I think that perfect information is what we are doing with supply and demand, how we know exactly what the demand will be if the supply is such and such

KM said...

Yay, Reid! Congratulations!

emkatbuto said...

1.Marginal Revenue- the change in the total revenue fro making one more. For PC, MR=P=D and is therefore constant, a straight horizontal line. While in a Monopoly the MR, D and MC curve determine P thefore MR is a separate curve...

NicolleM said...

2. Perfect information is about knowing everything about the actions of other people that is always updated as new information arises.
3. It's important because you can see how we are kind of supposed to run as an economy. We can have the hope of reaching that equilibrium.

forsnic said...

1. the MR facing a competitive firm is a straight horizontal line and is equal to demand, price, AR. the MR facing a monopolistic firm is lower than the price and demand. and it is not straight across.

forsnic said...

4. this is similar to the MR situation. the demand curve for PC is equal to price,MR, and AR and is a horizontal line. the demand curve for Monopolist is what we are used to seeing for a demand curve (downward sloping). it is the same as AR just like in PC.

Reid said...

If you don't study something that's perfect then you can't compare it with something that has imperfections. This is why PC is so important to study.

Reid said...

The PC curve is different from the monopoly curve partly due to the fact that Perfect competitors are price takers so they can't set thier price they have to take it from the supply and demand curve. Monopolist have to set the quantity which determines the price where MR crosses MC. MR doesn't equal price like in PC graphs. They take this value and draw a line up to the demand curve which sets the price.

amepham said...

The PC curve is important because it shows an example of how the market should be. We need to have something for the companies to aim for because PC would be ideal for every company.