Product Markets
Now that we've explored the basics of supply and demand, it's time to differentiate between the markets for different products. Why is an airline ticket so much more expensive than a pencil? This and many more important questions are answered by the study of economics.
We start by looking at Elasticity of Demand. |
Another interesting concept is that of price controls. We talked about these a bit in regular Economics, but here, we're looking at the actual hard numbers behind them. We know that a price ceiling is inefficient; in this lesson, we'll look at exactly how inefficient price controls are. We'll also explore the concept of deadweight loss, which is the saddest triangle in the world.
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Chapter 14 deals exclusively with different kinds of costs. We didn't talk about many of these in regular Economics, and this is probably the most complex, as well as the most important, chapter in the textbook. READ IT CAREFULLY!!!
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Chapters 15-18 get into the specifics of market structure for each of the four types of market structure. In decreasing order of competitiveness, they are: perfect competition, monopolistic competition, oligopoly, and monopoly. Pay attention to the way in which the graphs for each market structure differs slightly. Once you've figured these out, try to figure out how you could own and operate a perfectly price-discriminating monopoly. It may not be efficient, but you probably won't care when you're sitting on a stack of cash and wiping your nose with $100 bills.
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For some notes on Oligopoly, check out this link.
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