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ZERO-SUM GAME: A situation in which a fixed amount is divided up among the winners and losers. In a zero-sum game the wins equal the losses. Many stock market, or financial market, exchanges are zero-sum. One person buys low and sells high, while another buys high and sells low. The wealth in such transactions are merely transferred from one person to another. "Productive" market transactions, in contrast, are not zero-sum. The act of producing goods and services from resources that are consumed to satisfy wants and needs results in a net gain to society.
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Lesson 20: Oligopoly | Unit 4: Analysis
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Page: 18 of 24
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Topic:
Collusion Output
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- By combining their productive capabilities -- that is, their marginal cost curves -- the firms can now reach a profit-maximizing output.
- This is the same output level that would be reach if monopoly controlled the soft-drink market.
- The two firms maximize total industry profit by producing the quantity of output in which the marginal cost of each firm is equal to the marginal revenue for the overall market.
- A Little Cheating: Consider either firm's predicament. Both can increase profit by increasing production.
- However, under the collusion agreement, each firm can do a little better if they increase production -- so long as the other firms maintain the agreement and the higher price.
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FEDERAL DEFICIT, AGGREGATE DEMAND DETERMINANT One of several specific aggregate demand determinants assumed constant when the aggregate demand curve is constructed, and that shifts the aggregate demand curve when it changes. An increase in the federal deficit causes an increase (rightward shift) of the aggregate curve. A decrease in the federal deficit causes a decrease (leftward shift) of the aggregate curve. Other notable aggregate demand determinants are interest rates, inflationary expectations, and the money supply.
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YELLOW CHIPPEROON
[What's This?]
Today, you are likely to spend a great deal of time strolling around a discount warehouse buying club seeking to buy either a package of blank rewritable CDs or yellow cotton balls. Be on the lookout for poorly written technical manuals.
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This isn't me! What am I?
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The word "fiscal" is derived from a Latin word meaning "moneybag."
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"We succeed in enterprises (that) demand the positive qualities we possess, but we excel in those (that) can also make use of our defects." -- Alexis de Tocqueville, Statesman
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AAO
Authorized Acquisition Objective
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