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In a perfectly competitive market, the price would have been Pc and the quantity produced would have been Qc. But in a imperfectly competitive market, where marginal revenue is lower than prices, the price will instead land at the higher level of Pm while quantity will be at the lower level of Qm. For producers, the gains from the higher price consist in the ”A”-area while they lose the smaller potential gains in the ”B”-area. Consumers for their part will lose both the potential gains in the C-area and in the ”A”-area. The ”A”-area thus simply represents a redistribution from consumers to producers, while the ”C” and ”B”-areas represents economic efficiency-losses.

Generally speaking, the effect that increased output will have on price increases as the size of the company increases. This is because a given percentage increase in sales for a large company is bigger relative to the total market than the same percentage increase in sales for a small company, and all other things being equal a greater increase in supply will depress the price more.

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