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MACROECONOMIC THEORIES: Scientific theories that seek to explain phenomena associated with the macroeconomy. The primary phenomena investigated are unemployment, inflation, and the level of aggregate production. Macroeconomic theories also inevitably provide policy recommendations intended to improve the performance of the economy and to correct macroeconomic problems. A few of the more noted macroeconomic theories are: Classical economics, Keynesian economics, aggregate market (AS-AD) analysis, IS-LM analysis, Monetarism, and New Classical economics.
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Lesson 19: Monopolistic Competition | Unit 4: Analysis
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Page: 18 of 22
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In this unit, you should have learned about:- Why a monopolistic competition firm is faced with the same three short-run production alternatives as other firms based on a comparison between price, average total cost, and average variable cost
- That market control means a monopolistic competition firm does not have a short-run supply curve like that of perfect competition.
- How market control makes a monopolistic competition firm inefficient, but that the inefficiency is relatively minor.
- That a monopolistic competition firm has excessive capacity in the long run because of it's market control.
- Why advertising is used by monopolistic competition to promote product differentiation and to increase market control
- How advertising is used the shift the demand curve facing and firm and to reduce demand elasticity.
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AGGREGATE DEMAND DECREASE, SHORT-RUN AGGREGATE MARKET A shock to the short-run aggregate market caused by a decrease in aggregate demand, resulting in and illustrated by a leftward shift of the aggregate demand curve. A decrease in aggregate demand in the short-run aggregate market results in a decrease in the price level and a decrease in real production. The level of real production resulting from the shock can be greater or less than full-employment real production.
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PINK FADFLY
[What's This?]
Today, you are likely to spend a great deal of time lost in your local discount super center hoping to buy either a large, stuffed kitty cat or a cross-cut paper shredder. Be on the lookout for pencil sharpeners with an attitude.
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This isn't me! What am I?
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Mark Twain said "I wonder how much it would take to buy soap buble if there was only one in the world."
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"There is at least one point in the history of any company when you have to change dramatically to rise to the next level of performance. Miss that moment, and you start to decline. " -- Andy Grove, Intel Corp. chairman
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DIDMCA
Depository Institutions Deregulation and Monetary Control Act
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