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AGGREGATE DEMAND DETERMINANTS: An assortment of ceteris paribus factors that affect aggregate demand, but which are assumed constant when the aggregate demand curve is constructed. Changes in any of the aggregate demand determinants cause the aggregate demand curve to shift. While a wide variety of specific ceteris paribus factors can cause the aggregate demand curve to shift, it's usually most convenient to group them into the four, broad expenditure categories -- consumption, investment, government purchases, and net exports. The reason is that changes in these expenditures are the direct cause of shifts in the aggregate demand curve. If any determinant affects aggregate demand it MUST affect one of these four expenditures.
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Lesson 18: Monopoly | Unit 2: Revenue
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Page: 8 of 30
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- The general rule is that a firm with less market control faces a more elastic demand curve.
- Let's take a look at some alternative demand curves to illustrate this point.
- Market Demand: Note that it has a negative slope, reflecting the law of demand.
- Monopoly Demand: The monopoly demand curve is exactly the same as the market demand curve.
- Perfect Competition Demand: This demand curve is horizontal, or perfectly elastic, at the going market price.
- Monopolistic Competition Demand: This demand curve is relatively flat, but not horizontal. Demand is relatively elastic, but not perfectly elastic.
- Our interest in these demand curves is what it means for the revenue generated by a monopoly.
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ALLOCATIVE EFFICIENCY Obtaining the most consumer satisfaction from available resources. In other words, resources are allocated in such a way that consumer satisfaction is at its highest possible level. This is also termed either efficiency or economic efficiency.
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GREEN LOGIGUIN
[What's This?]
Today, you are likely to spend a great deal of time searching for rummage sales wanting to buy either a coffee table shaped like the state of Florida or storage boxes for your summer clothes. Be on the lookout for mail order catalogs with hidden messages.
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The average bank teller loses about $250 every year.
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"The past is a foreign country; they do things differently there." -- Leslie Poles Hartley, Writer
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JFE
Journal of Financial Economics
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