micro final

perfect competition

many buyers + sellers, identical products, free entry + exit, firms are price takers

long-run adjustment

in long-run equilibrium, firms earn 0 economic profit, price rises—>positive profit—>entry—>price falls, price falls—>losses—>exit—>price rises

shutdown price

minimum of the average variable cost curve, below this the firm should not produce in the short run

firms supply curve

a perfectly competitive supply curve is the MC curve above the AVC minimum

monopoly characteristics

one seller, barriers to entry, price maker, faces downward sloping demand, profit>MR bc lowering price effects all units sold

coase theorem

private bargaining can solve externalities if property rights are well-defined + transaction costs are low

efficient emissions level

occurs when marginal social benefit=marginal social cost —>MSB=MSC

tradable pollution permits

a market-based solution set up by governments to control pollution, established by governments when they issue tradable pollution permits