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TIE-IN SALE: A type of sale in which consumers can buy one good only if they purchase another good as well. For example, if your grocery store sells you a bag of tea with the condition that you buy a pound of sugar, that would be a tie-in sale. Because they allow a monopoly to increase its profit over what it could make by selling the two goods separately at constant prices, tie-in sales can be used to price discriminate. However, it is important to realize that there are other reasons for tie-in sales other than price discrimination, such as to increase efficiency. For example, when we buy a car, it comes as a package of several goods (tires, engine, etc), which would be very difficult (and inefficient) for consumers to assemble if they were bought separately.
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Lesson 12: Business Cycles | Unit 1: Instability
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Page: 4 of 26
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Topic:
Contractionary Bad Times
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Contractionary bad times give us the most problems.- First: Real GDP declines during a contraction. This means less production for the four sectors to buy.
- Second: Unemployment increases. Resources, especially labor, produce less and receive less income. 3-5 million workers newly employed.
- Third: The incomes of employed resources also tend to fall, or at least not rise as much as an expansion.
- Fourth: Business profits decline and bankruptcies increase.
- Fifth: Social problems, including crime, poverty, and alcoholism, worsen.
But contractions have some good:- Inflation remains low or declines.
- Some resources are more efficiently allocated.
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AVERAGE REVENUE, MONOPOLISTIC COMPETITION The revenue received for selling a good per unit of output sold, found by dividing total revenue by the quantity of output. Average revenue often goes by a simpler and more widely used term... price. For a monopolistically competitive firm average revenue is greater than marginal revenue. Average revenue for a monopolistically competitive firm is often depicted by a negatively-sloped average revenue curve.
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PURPLE SMARPHIN
[What's This?]
Today, you are likely to spend a great deal of time flipping through the yellow pages trying to buy either a velvet painting of Elvis Presley or a wall poster commemorating yesterday. Be on the lookout for the last item on a shelf.
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This isn't me! What am I?
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Mark Twain said "I wonder how much it would take to buy soap buble if there was only one in the world."
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"If anything terrifies me, I must try to conquer it. " -- Francis Charles Chichester, yachtsman, aviator
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TVC
Total Variable Cost
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