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 RESOURCE PRICE, AGGREGATE SUPPLY DETERMINANT: One of three categories of aggregate supply determinants assumed constant when the aggregate supply curve is constructed, and which shifts the aggregate supply curve when it changes. An increase in a resource price causes a decrease (leftward shift) of the short-run aggregate supply curve. A decrease in a resource price causes an increase (rightward shift) of the short-run aggregate supply curve. The other two categories of aggregate supply determinants are resource quantity and resource quality. Specific determinants falling into this general category include wages and energy prices. Anything affecting the prices paid for the use of labor, capital, land, and entrepreneurship is also included.
 Most Viewed (Number) production stages (256)limited resources (154)total variable cost curve (125)marginal physical product (124)number of buyers, demand determinant (111) Visit the WEB*pedia

 Lesson 20: Oligopoly | Unit 4: Analysis Page: 19 of 24

 Topic: Game Theory <=PAGE BACK | PAGE NEXT=>

• A handy way to analyze this type of market interdependence is through game theory.

• Game theory is an analysis that illustrates how the choices between two players affect the outcomes of a "game."
• Assume the market has only two firms, OmniCola and Juice-Up.

• This table presents alternative outcomes for different advertising choices by OmniCola and Juice-Up:

1. If OmniCola and Juice-Up BOTH decide to advertising, then each receives \$200 million in profit.

2. However, if NEITHER OmniCola or Juice-Up decide to advertising, then each receives \$250 million in profit.

3. Alternatively, if OmniCola advertises but Juice-Up does not, then OmniCola receives \$350 million in profit and Juice-Up receives only \$100 in profit.

4. But, if Juice-Up advertises and OmniCola does not, then Juice-Up receives \$350 million in profit and OmniCola receives only \$100 in profit.

• What to do?

• The end result is that both firms decide to advertise.

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UTILITY ANALYSIS

A subset of consumer demand theory that analysis consumer behavior and market demand using total utility and marginal utility. The key principle of utility analysis is the law of diminishing marginal utility, which offers an explanation for the law of demand and the negative slope of the demand curve.

 WHITE GULLIBON[What's This?] Today, you are likely to spend a great deal of time waiting for visits from door-to-door solicitors seeking to buy either car battery jumper cables or a dozen high trajectory optic orange golf balls. Be on the lookout for strangers with large satchels of used undergarments.Your Complete Scope
 The 1909 Lincoln penny was the first U.S. coin with the likeness of a U.S. President.
 "People of mediocre ability sometimes achieve outstanding success because they don't know when to quit. Most men succeed because they are determined to. "-- George Allen, U.S. senator
 CPI-UConsumer Price Index-All Urban Consumers
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