|
|
PERFECT COMPETITION AND DEMAND: The demand curve for the output produced by a perfectly competitive firm is perfectly elastic at the going market price. The firm can sell all of the output that it wants at this price because it is a relatively small part of the market. As a price taker, the firm has no ability to charge a higher price and no reason to charge a lower one. The market price facing a perfectly competitive firm is also the firm's average revenue and, most importantly, its marginal revenue.
Visit the GLOSS*arama
|
|
|
|
|
Lesson 10: Utility and Demand | Unit 4: On To Demand
|
Page: 14 of 21
|
|
Topic:
A Generalized Choice
|
|
|
|
- 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!
|
|
|
|
|
|
|
MARGINALLY-ATTACHED WORKERS People who are willing and able to work, who have either held a job or searched for employment within the last year, but are not actively seeking employment. Discouraged workers, people who are willing and able to engage in productive activities, but due to their overwhelming lack of success believe that any effort to find a job will be fruitless so they have stopped seeking employment, fall within this broader category of marginally-attached workers. People can be marginally attached to the labor force for a variety of reasons, discouraged workers, in contrast, achieve their designation specifically because they believe search efforts are not worthwhile.
Complete Entry | Visit the WEB*pedia |
|
|
BROWN PRAGMATOX
[What's This?]
Today, you are likely to spend a great deal of time strolling around a discount warehouse buying club trying to buy either a wall poster commemorating last Friday (you know why) or a country wreathe. Be on the lookout for pencil sharpeners with an attitude.
Your Complete Scope
This isn't me! What am I?
|
|
|
Before 1933, the U.S. dime was legal as payment only in transactions of $10 or less.
|
|
|
"I can't change the direction of the wind, but I can adjust my sails to always reach my destination." -- Jimmy Dean
|
|
PVCF
Present Value Cash Flow
|
|
|
Tell us what you think about AmosWEB. Like what you see? Have suggestions for improvements? Let us know. Click the User Feedback link.
User Feedback
|
|
