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 LOSS MINIMIZATION, MONOPOLY: The marginal revenue and marginal cost approach to analyzing a monopoly firm's short-run production decision can be used to identify economic loss. The U-shaped cost curves used in this analysis provides all of the information needed on the cost side of the firm's decision. The demand curve facing the firm (which is also the firm's average revenue curve) and the firm's marginal revenue curve provides the information needed on the revenue side.
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 Lesson 12: Elasticity and Demand | Unit 3: Measurement Page: 12 of 25

 Topic: The Demand Curve <=PAGE BACK | PAGE NEXT=>

• Elasticity is NOT constant along the demand curve.

• In particular, the demand curve can be divided into the five elasticity alternatives:

• Perfectly elastic: At the point of intersection between the demand curve and the vertical price axis, demand is perfectly elastic.

• Relatively elastic: Over the "upper" half of the demand curve between midpoint and the vertical price axis, demand is relatively elastic.

• Unit elastic: At the exact midpoint that divides the demand curve into two equal segments, demand is unit elastic.

• Relatively elastic: Over the "lower" half of the demand curve between midpoint and the horizontal quantity axis, demand is relatively inelastic.

• Perfectly inelastic: At the point of intersection between the demand curve and the horizontal quantity axis, demand is perfectly inelastic.

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DISSAVING

Another term for negative saving the occurs during a given period of time in which consumption expenditures exceed income. Dissaving is only possible by spending past or future income on current consumption. That is, using income saved from previous periods or borrowing income to be earned in future periods. Saving is generally illustrated by the vertical difference when between the consumption line and the 45-degree line. Dissaving results when the 45-degree line lies above the consumption line.

 PURPLE SMARPHIN[What's This?] Today, you are likely to spend a great deal of time looking for the new strip mall out on the highway seeking to buy either car battery jumper cables or a dozen high trajectory optic orange golf balls. Be on the lookout for spoiled cheese hiding under your bed hatching conspiracies against humanity.Your Complete Scope
 Post WWI induced hyperinflation in German in the early 1900s raised prices by 726 million times from 1918 to 1923.
 "The vacuum created by failure to communicate will quickly be filled with rumor, misrepresentations, drivel and poison. "-- C. Northcote Parkinson, historian
 ACCRAnnual Cost of Capital Recovery
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