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WEALTH PYRAMID: A handy technique that many get-rich-quick schemes use to transfer a little wealth from a lot of people into the overflowing pockets of a few. In works in this manner--A person or business establishes a multi-level pyramid of investors, employees, or "distributors." Each level is responsible for recruiting the next level beneath it. The trick is that each distributor at one level recruits several distributors into the next lower level in an ever-expanding fashion. Each recruit transfers a little, teeny, tiny bit of their own wealth to the next higher level. In that each higher level has fewer members, that little, teeny, tiny bit of wealth accumulates rapidly, making those at the top incredibly well-off.
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Lesson 19: Monopolistic Competition | Unit 3: Output
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Page: 13 of 22
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Topic:
Long-Run Equilibrium
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- The long run, which is the period in which all inputs are variable, has two implications for monopolistic competition firms.
- A firm adjusts plant size to maximize profit in the long run.
- Firms enter and leave the industry to achieve zero economic profit.
- The end result of this long-run adjustment is:
- The demand curve for each firm is tangent to the long-run average cost curve and the short-run average total cost curve. This ensures zero economic profit.
- However, because the demand curve is negatively sloped, this point of tangency takes place on the negatively-sloped portion of the long-run average cost curve.
- The negatively-sloped portion of the long-run average cost curve portion results from economies of scale and is less than the minimum efficient scale.
- The primary implication is that monopolistic competition does not use capital as efficiently as perfect competition.
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PRODUCT MARKETS Markets that exchange final goods and services, that is, the output that is combined into gross domestic product. The buyers of this production are the four macroeconomic sectors--household, business, government, and foreign. The seller of this production is primarily the business sector. A substantial part of macroeconomics is devoted to explaining how and why gross domestic product exchanged through product markets rises or falls. Product markets, also termed output or goods markets, are one of three primary sets of macroeconomic markets. The other two are resource markets and financial markets.
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BROWN PRAGMATOX
[What's This?]
Today, you are likely to spend a great deal of time searching the newspaper want ads looking to buy either a microwave over that won't burn your popcorn or a T-shirt commemorating the first day of winter. Be on the lookout for letters from the Internal Revenue Service.
Your Complete Scope
This isn't me! What am I?
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A thousand years before metal coins were developed, clay tablet "checks" were used as money by the Babylonians.
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"The marvelous thing about human beings is that we are perpetually reaching for the stars. The more we have, the more we want. And for this reason, we never have it all. " -- Joyce Brothers, psychologist
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CUUS
Comsumer Union of the United States
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