AP econ unit 4.1-4.3

ts way to little cards bruh smt wrong here

Monopoly

A market structure with one firm a unique product high barriers to entry where the firm is a price maker and uses slight advertising

Natural monopoly

An industry in which a single firm can produce at a lower cost than two or more firms

Monopolist Profit Maximization

The output quantity is determined where Marginal Revenue (MR) equals Marginal Cost (MC) and the price charged is set by the demand curve (D) at that quantity

Shutdown Rule (Monopoly)

A firm should continue producing in the short run as long as the price is greater than the Average Variable Cost (AVC)

Total Revenue Test (Inelastic Range)

When a Price increase causes Total Revenue (TR) to increase which is a positive correlation

Total Revenue Test (Elastic Range)

When a Price increase causes Total Revenue (TR) to decrease which is a negative correlation

Price Discrimination

The practice of selling the same product to different consumers at several prices resulting in more profit and no consumer surplus

Monopolistic Competition

A market structure with a relatively large amount of sellers differentiated products some control over price and easy entry and exit

Non-Price Competition

Firms seek to capture market share by making unique goods using tactics like service brand name product location or advertising

Oligopolies

A market structure with a few large producers identical or differentiated products high barriers to entry control over price and mutual interdependence

Mutual Interdependence (Oligopoly)

The strategic consideration an oligopoly firm must make of its rival's actions when setting its own prices and output

Game theory

The study of how people behave in strategic situations

Nash equilibrium

The optimal outcome that occurs when both firms make decisions simultaneously and neither has an incentive to unilaterally change their decision

Dominant strategy

The best option for a firm to choose regardless of what the other firm choose