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PREFERENCES CHANGE, UTILITY ANALYSIS: A disruption of consumer equilibrium identified with utility analysis caused by changes in the preferences for a good, which likely results in a change in the quantities of the goods consumed. The change in preferences alters the marginal utility-price ratio and forces a reevaluation of the rule of consumer equilibrium.
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Lesson 19: Monopolistic Competition | Unit 5: Evaluation
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Page: 20 of 22
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Topic:
The Good: Differences
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- While monopolistic competition is inefficient and has excess capacity, all is not bad:
- Competition Among the Many: Although monopolistic competition is not perfect competition, it is competition.
- Price and Marginal Cost: While monopolistic competition does not produce the quantity that equates price and marginal cost, the difference is often NOT very big.
- Different Preferences: Because monopolistic competition firms offer different products, buyers are able to satisfy different tastes and preferences.
- Monopolistic competition may actually be a BETTER market structure than perfect competition -- at least better for real world people who live in the real world.
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INDUCED SAVING Household saving that depends on income or production (especially disposable income, national income, or even gross domestic product). That is, changes in income induce changes in saving. Induced saving reflects the fundamental psychological law put forth by John Maynard Keynes. It is measured by the marginal propensity to save (MPS) and is reflected by the positive slope of saving line. The alternative to induced saving is autonomous saving, which does not depend on income.
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PURPLE SMARPHIN
[What's This?]
Today, you are likely to spend a great deal of time at a crowded estate auction trying to buy either a case of blank recordable DVDs or a pair of red goulashes with shiny buckles. Be on the lookout for the last item on a shelf.
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Rosemary, long associated with remembrance, was worn as wreaths by students in ancient Greece during exams.
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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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ICTB
International Customs Tariffs Bureau
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