1. Home
  2. Flashcards
  3. Preview

ECON 1

  1. Collusion
    Agreement amoungst firms ina market about P & Q
  2. Why are cartels unstable?
    Incentive to cheat
  3. Price of Eq. for a monopoly =?
    MC/(1-(1/Ed))
  4. How to obtain mkt power
    • Own a key resource
    • Govt created
    • Nat monop
    • Network externalities- become more valuable w popilarity
  5. Ways to obtain mkt power
    • Better than the rest- Microsoft
    • Differentiate product- debeers v fake diamond
    • merge
    • collude
  6. Ways to measure mkt power
    • number of sellers
    • 4-firm conc ratio
    • HHI
  7. 60 10 5 5 5 5 HHI?
    C4= 85% HHI= 3900
  8. Sherman anti-trust act
    • Outlaws trust conspiracy in restraint of trade
    • felony to monopolize
  9. Clayton Act
    Merger illegal if substantially lessens competition or tends to create a monop
  10. 1000 1800 HHI
    not moderately highly concentrated
  11. 1st Degree price discrimination
    Perfect price disc- Max a consumer is willing to pay- ebay bartering. many dots on d-curve
  12. 2nd degree price dicrimintation
    Block pricing- price falls per unit purchased- costco
  13. 3rd degree price discrimination
    Market Segmentation- Kid price senior price
  14. 2-part tariff
    form of 2nd degree which the comsumer pays 1 price for right to buy as much 4 second price- zipcar
  15. Tie in sales/bundling
    travel package
  16. Predatory pricing
    lowers price to eliminate competition then raises it- illegal
  17. Resale price maintenance
    MSRP manufacturer sets price 4 retailer
  18. Price Skimming
    High price then decreases- DVD
  19. Price penetration
    Low price then increases over time- Plane tickets promotions ect
  20. Odd pricing
    $4.99
  21. Cost plus pricing
    P=ATC+ % markup-- C-store
  22. Clothing Boutiques restautants liquor stores beauty salon book stores coffee shops bed and brekfeast
    Competitive monopolies
  23. Competitive monopolies d-curve is
    More elastic
  24. How do firms of comp monopolies diferetiate themselves
    Brandin quality ads demos brand loylaty trademarks
  25. Externalities
    a cost or benefit that affects someone who is not directly involved in the production or consumption of a good or service
  26. Negative externalities in production
    • overproduces underpriced Qe les than qe opt
    • upe mkt less than Pe optimal
    • Polution permits
  27. Pos externalities in prod
    Subsidies/Grants
  28. negative externalities in consumption
    smoke awareness
  29. Positive ext in consumption
    scholarships
  30. natural monopolies
    excl not rivalrous- turnpike no ppl
  31. common resource
    US1 @ rush hour raval not exclude
  32. pvt goods
    excludable and rival country club sellout event
  33. public good
    exclusive non rivaling goods such as national defense
  34. How to obtain mkt power?
    Own a key resourceGovet createdBe a natural monopolyNetwork extenalities
  35. Eff. of Scale for q is at
    ATC @ MC
  36. Price of eq. equaion 4 monop
    MC/1-(1-Ed)
  37. collusion
    Agreement among firms in a market about P and Q
Author
Anonymous
ID
2155
Card Set
ECON 1
Description
ECON
Updated

  1. Home
  2. Flashcards
  3. Preview