1. Describe what is needed for a perfectly competitive market.
2. Describe what a price taker is
3. Why is demand curve horizontal for perfectly competitive firm
4. Graph and describe a short run profit for a firm in a perfectly competitive market
5. Compute economic profit for the graph in the previous problem
6. What is the formula for break-even profit
7. When will a firm shut down operations in the short run
8. Draw a graph of a firm covering AVC, but not covering ATC. Will the firm still produce and what is its contribution to fixed costs (show on graph)?
9. Show a supply curve for a firm using AVC, MC, and D (draw the graph). On this graph show a D where no production takes place.
10. How is a market supply curve derived
11. Graph the long run zero profit outcome for a firm in a perfectly competitive market.
12. Graph an increase in demand in an increasing cost industry (show short run and long run). Show individual firm short run profit from this on a separate graph.
13. Graph an increase in demand in a constant cost industry (show short run and long run) (ice industry after Hurricane Katrina).
14. Describe a monopoly and what are the barriers to entry they can enjoy
15. Graph and explain MR and D for a monopolist. Do the same for a firm in perfect competition
16. How is MR calculated for a monopolist
17. Graph a monopoly profit
18. Graph and explain the deadweight loss from a monopoly
19. What is a rent seeking monopolist
20. Is a patent good or bad for society, explain with numbers.
21. What is price discrimination and what is needed for a company to do it
22. Graph price discrimination for a movie theatre
23. Describe a monopolistic competitive market structure.
24. Describe 3 characteristics of monopolistic competition.
25. Graph a short run profit for a monopolistic competitor (show and calculate the profit).
26. How are profits squeezed as a second firm enters this type of market structure (graph and explain)?
27. Graph the long run equilibrium for a company in this market structure.
28. Describe the costs and benefits of a monopolistic competitive market structure.
29. Why would an entrepreneur be willing to pay for a Dunkin Donuts franchise?
30. What signal is sent to customers when companies hire celebrities to endorse their products?
31. Describe why happy hour prices at the bar are lower even though demand for drinks is higher?
32. Describe an oligopolistic market structure.
33. What are 3 characteristics of an oligopolistic market structure?
34. Describe in detail 2 ways to measure market structure.
35. Describe a cartel.
36. Graph a cartel profit maximizing level of output and price.
37. Graph a duopoly profit maximizing level of output and price.
38. Describe the duopolists' dilemma
39. Describe a Nash equilibrium
40. Describe how a low price guarantee can overcome the duopolists' dilemma.
41. Describe how the tit-for-tat strategy punishes firms for cheating on the cartel price.
42. Describe the Sherman Antitrust Act of 1890.
43. Describe the problem with a price leadership system and why it may not last.
44. Describe the prisoners dilemma in detail
45. Describe in detail how the insecure monopolist discourages entry from a second firm
46. How is the limit price determined for an insecure monopolist
47. Describe a contestable market and how it affects a monopolist
48. Why do duopolists advertise when it would be in their interest not to
49. Describe how advertising is financed in the milk industry
50. Describe the 5 factors of production.