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COLLUSION AND EFFICIENCY: Colluding oligopolistic firms generally produce less output and charge a higher price than would be the case for a perfectly competitive industry. In essence, colluding oligopolistic firms function just as if a market were monopolized. The price charged by the colluding firms is higher than the marginal cost of production. The equality between price and marginal cost is THE key indication that resources are allocated efficiently and that society's resources are being used to generate the highest possible level of satisfaction. Because the colluding firms control the market like a monopoly, the market demand curve is THE demand curve for the colluding firms's. With a negatively-sloped demand curve, price is greater than marginal revenue. And because a profit-maximizing firm equates marginal revenue with marginal cost, the price charged by the colluding firms when the maximize industry profit is greater than marginal cost.
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Lesson Contents
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Unit 1: Background |
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Unit 2: Resources |
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Unit 3: Factor Supply |
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Unit 4: Determinants |
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Unit 5: Taking Stock | |
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Factor Supply
- The first unit of this lesson, Background, begins by laying the foundation for factor markets and factor supply.
- In the second unit, Resources, we examine specific supply considerations for the alternative factors of production.
- The third unit, Cost And Supply, then takes a look at the three key factor cost concepts -- total, average, and marginal.
- In the fourth unit, Determinants, we examine the key determinants that shift the factor supply curve, especially mobility.
- The fifth and final unit, Taking Stock, then closes this lesson with a review of factor supply and a preview of factor market analysis to come.
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SEASONAL UNEMPLOYMENT Unemployment attributable to relatively regular and predictable declines in particular industries or occupations over the course of a year, often corresponding with the climatic seasons. Unlike cyclical unemployment, which may or may not occur at any given time, seasonal unemployment is an essential part of many jobs. For example, a regular, run-of-the-mill, department store Santa Clause can count on 11 months of unemployment each year. Seasonal unemployment is one of four unemployment sources. The other three are cyclical unemployment, frictional unemployment, and structural unemployment.
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PURPLE SMARPHIN
[What's This?]
Today, you are likely to spend a great deal of time flipping through mail order catalogs seeking to buy either decorative picture frames or storage boxes for your income tax returns. Be on the lookout for door-to-door salesmen.
Your Complete Scope
This isn't me! What am I?
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Okun's Law posits that the unemployment rate increases by 1% for every 2% gap between real GDP and full-employment real GDP.
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"Old minds are like old horses; you must exercise them if you wish to keep them in working order. " -- John Adams, 2nd US president
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HIP
Health Insurance Plan
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