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PERFECT COMPETITION, LONG-RUN PRODUCTION ANALYSIS: In the long run, a perfectly competitive firm adjusts plant size, or the quantity of capital, to maximize long-run profit. In addition, the entry and exit of firms into and out of a perfectly competitive market guarantees that each perfectly competitive firm earns nothing more or less than a normal profit. As a perfectly competitive industry reacts to changes in demand, it traces out positive, negative, or horizontal long-run supply curve due to increasing, decreasing, or constant cost.
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Lesson 10: Utility and Demand | Unit 5: Beyond Demand
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Page: 18 of 21
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- As consumers we are concerned with all sorts of decisions.
- Consumer demand theory, utility, and the law of diminishing marginal utility play a key part in these decisions.
- Consumer demand theory also helps explain why you might...
- Watch Gilligan's Island rather than Star Trek.
- Watch Gilligan's Island rather than reading a book.
- Hang out with friends watching Gilligan's Island the night before an exam rather than studying.
- Vote in major Presidential elections but not in local referendums.
- Steal hundreds of dollars of office supplies from your work over a period of years.
- Stop on a highway to help a complete stranger fix a flat tire.
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MARGINAL UTILITY AND DEMAND An explanation of the law of demand and the negatively-sloped demand curve based on utility analysis and the law of diminishing marginal utility. The law of diminishing marginal utility states that marginal utility declines as consumption increases. Because demand price depends on the marginal utility obtained from a good, price also declines as consumption increases, meaning price and quantity demanded are inversely related, which is the law of demand.
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ORANGE REBELOON
[What's This?]
Today, you are likely to spend a great deal of time browsing through a long list of dot com websites wanting to buy either a black duffle bag with velcro closures or any book written by Isaac Asimov. Be on the lookout for empty parking spaces that appear to be near the entrance to a store.
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This isn't me! What am I?
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Al Capone's business card said he was a used furniture dealer.
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"People of mediocre ability sometimes achieve outstanding success because they don't know when to quit. " -- George Allen, U.S. senator
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ANOVA
Analysis of Variance
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