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PERFECT COMPETITION, LONG-RUN EQUILIBRIUM CONDITIONS: The long-run equilibrium of a perfectly competitive industry generates six specific equilibrium conditions, including: (1) economic efficiency (P = MC), (2) profit maximization (MR = MC), (3) perfect competition (MR = AR = P), (4) breakeven output (P = AR = ATC), (5) minimum production cost (MC = ATC), and (6) minimum efficient scale (MC = ATC = LRAC = LRMC).
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Lesson 23: Factor Market Equilibrium | Unit 5: Bilateral Monopoly
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Page: 22 of 24
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Topic:
Four Marginal Curves
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- The two sides of the factor market for labor services have decided to negotiate a factor price.
- Four curves are contained in the diagram.
- Marginal Revenue Product and Demand
- Marginal Revenue
- The MRP curve is based on the revenue received by the the firm when it hires labor to produce resort services.
- The MR curve thus represents the additional revenue received by the monopoly union for selling additional unions of its output, which is labor services.
- Marginal Cost and Supply
- Marginal Factor Cost
- The MC curve is based on the cost incurred by the union when sells labor to the firm.
- The MFC curve thus represents the additional cost incurred received by the monopsony resort for buying additional units of labor services.
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ABILITY-TO-PAY PRINCIPLE A taxation principle stating that taxes should be based on the ability to pay taxes. The ability-to-pay principle works from the proposition that those who have the greatest income should pay the most taxes. The ability-to-pay principle is the only reasonable way to finance the provision of public goods such as national defense, public health, and environmental quality. This is one of two taxation principles. The other is the benefit principle, which states taxes should be based on the benefits received.
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PINK FADFLY
[What's This?]
Today, you are likely to spend a great deal of time watching the shopping channel trying to buy either income tax software or a how-to book on the art of negotiation. Be on the lookout for celebrities who speak directly to you through your television.
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This isn't me! What am I?
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The average bank teller loses about $250 every year.
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"Chance favors only the prepared mind." -- Louis Pasteur, biologist
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WPI
Wholesale Price Index
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