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MARKET SHARE: The fraction of an industry's total sales accounted for by a single business. In general, market share is a "first-guess" indicator of a firm's market control. If, for example, a company has a market share of 100 percent (that is, a monopoly), then you can rest assured it has a substantial amount of market control. A company with a 25 percent market share has less, but still notable, market control. In fact, when you get right down to the bottom line, the phrase "market share" is only worth mentioning for oligopolistic firms with a significant degree of market control. There really is no market control for a monopolistically competitive firm with a 0.00000001 percent market share.
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Lesson 10: Utility and Demand | Unit 4: On To Demand
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Page: 14 of 21
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Topic:
A Generalized Choice
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- In many cases buyers are making choices between ONE good and EVERY other good that they could be purchasing.
- The presumption is that every other good satisfies the rule of consumer equilibrium.
- The question now becomes: How much beach frolicking do I undertake (or purchase) given that my going marginal utility-price ratio is 3 utils per dollar for other goods?
- Employing the rule of consumer equilibrium, I need to equate the marginal utility-price ratio (MU/P) for beach frolicking with the marginal utility-price ratio for other goods.
MU/P for beach frolicking = MU/P for other goods - Because the marginal utility-price ratio for other goods is 2 utils per dollar, the time I spend at the beach needs generates to generate the same 2 utils per dollar.
- If the price per hour at the beach is $2, then I need to stay at the beach until my marginal is 4 utils, a value generated at 5 hours. This gives me a marginal utility-price ratio (MU/P) for beach activity of 2 utils per dollar.
- I have satisfied the rule of consumer equilibrium!
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SELF CORRECTION, INFLATIONARY GAP The automatic process in which the aggregate market eliminates an inflationary gap created by a short-run equilibrium that is greater than full employment through increases in wages (and other resource prices). The self-correction mechanism is triggered by short-run resource market imbalances that are closed by long-run price flexibility. The self-correction process of the aggregate market also acts to close a recessionary gap with lower wages (and other resource prices).
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WHITE GULLIBON
[What's This?]
Today, you are likely to spend a great deal of time waiting for visits from door-to-door solicitors wanting to buy either a small, foam rubber football or an instructional DVD on learning to the play the oboe. Be on the lookout for celebrities who speak directly to you through your television.
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This isn't me! What am I?
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The penny is the only coin minted by the U.S. government in which the "face" on the head looks to the right. All others face left.
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"Recipe for success. Study while others are sleeping; work while others are loafing, prepare while others are playing, and dream while others are wishing." -- William A. Ward
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IQ
Import Quota
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