MindMap Gallery Principles of Economics Microeconomics Volume (7th Edition) Reading Notes
Chapter 15: Monopoly Chapter 16: Monopolistic Competition Chapter 17: Oligarchs Chapter 18: Factors of Production Market Chapter 19: Income and Discrimination
Edited at 2021-02-08 10:06:56Avatar 3 centers on the Sully family, showcasing the internal rift caused by the sacrifice of their eldest son, and their alliance with other tribes on Pandora against the external conflict of the Ashbringers, who adhere to the philosophy of fire and are allied with humans. It explores the grand themes of family, faith, and survival.
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[Zootopia Character Relationship Chart] The idealistic rabbit police officer Judy and the cynical fox conman Nick form a charmingly contrasting duo, rising from street hustlers to become Zootopia police officers!
Avatar 3 centers on the Sully family, showcasing the internal rift caused by the sacrifice of their eldest son, and their alliance with other tribes on Pandora against the external conflict of the Ashbringers, who adhere to the philosophy of fire and are allied with humans. It explores the grand themes of family, faith, and survival.
This article discusses the Easter eggs and homages in Zootopia 2 that you may have discovered. The main content includes: character and archetype Easter eggs, cinematic universe crossover Easter eggs, animal ecology and behavior references, symbol and metaphor Easter eggs, social satire and brand allusions, and emotional storylines and sequel foreshadowing.
[Zootopia Character Relationship Chart] The idealistic rabbit police officer Judy and the cynical fox conman Nick form a charmingly contrasting duo, rising from street hustlers to become Zootopia police officers!
Chapter 15 to Chapter 19
Chapter 15 Monopoly
1. Monopoly (price determiner) A sole seller business with no substitutes
Monopoly resources: key resources owned by a single company
Government regulation: The government gives exclusive power to individual companies
Production process: lower than the cost of large-scale enterprise production
Natural monopoly: only one producer is needed for efficient production (always economies of scale, decreasing average total cost) It is formed when there are economies of scale in the output range and the market size is just within the range of economies of scale. But as the market scale expands, natural monopoly will turn into a competitive market, and new companies will enter the industry.
2. Monopoly income and profits
Marginal revenue: The monopolist’s marginal revenue is lower than that of competitive firms (marginal revenue is less than price) To increase sales, the monopolist must lower the price of units sold (price ≠ marginal cost otherwise the firm will exit) The marginal revenue of the enterprise cannot be negative
Profit maximization: marginal revenue of production equals marginal cost, price is greater than marginal revenue, that is, P>MR=MC Implement low output and high prices
Monopoly deadweight loss: Potential consumers do not purchase goods worth more than their marginal cost
3. Price discrimination Selling the same product at different prices ①Manufacturers are not price takers ②Manufacturers differentiate customers based on elasticity of demand ③Manufacturers can prevent products from being resold
general price discrimination
Price discrimination is a rational strategy for maximizing profits
Segment customers based on willingness to pay (certain market forces prevent attempts at price discrimination such as "arbitrage")
Price discrimination can enhance economic welfare
Will cause deadweight loss (similar to tax)
perfect price discrimination
have some market power
Understand each customer's willingness to pay and charge different prices (reduces consumer surplus)
Examples: movie tickets, airline fares, discount coupons
4. Public policies for monopoly
Antitrust laws: control of corporate monopolies, price manipulation, and segmentation of market activities Prohibition of collusion between enterprises to reduce market competition
Regulation: The government regulates the pricing of monopolies
Public ownership: turning private monopoly into government monopoly
Inaction: When the market failure is relatively small, the government can choose not to act
Antitrust laws give the government the power to regulate mergers between companies Business mergers are more efficient and enhance social welfare, but they may also result in excessive market share and the formation of monopolies. (A monopoly market is not the most efficient market for resource allocation and will produce deadweight losses)
Chapter 16 Monopolistic Competition
1. Type of market structure
Monopoly: A sole seller firm with no substitutes
Oligopoly: A market in which a few sellers offer similar or identical products (several firms)
Monopolistic competition: a market in which many similar but not identical products are sold (differentiated products, many sellers, free entry and exit) Increase output when marginal revenue is greater than marginal cost When the price is higher than average total cost, that is, when the firm has an economic profit, new firms have an incentive to enter the market. until price equals average total cost
Perfect competition: many markets selling identical products (Same product, many sellers, free entry and exit)
Monopolistic competition is like a monopoly: the price charged is higher than the marginal cost, (marginal revenue is greater than the marginal cost of increasing its production) Monopolistic competition is like competition: in the long run firms can enter and exit the market freely (new firms will enter if the price is higher than average total cost) Product price equals average total cost and firm profit is zero, but price is higher than marginal cost A monopolistic competitor produces too little output compared to its most efficient level, making it difficult for policymakers to solve ① The cost for policymakers to regulate all production enterprises is huge; ② When pricing is based on marginal cost, the enterprise is losing money, and the government needs to provide subsidies.
2. Advertising and Branding
Defender: Companies use advertising and brands to provide information to consumers and to compete on price and product quality.
Critics: Companies use advertising and branding to manipulate consumer preferences and reduce competition
Advertising reduces economic welfare: ① Advertising has a cost; ② Advertising exaggerates the quality differences between similar products; ③ When the demand curve is inelastic, charge a price higher than marginal cost Advertising enhances economic welfare: ① Provides useful information and improves the ability to allocate resources effectively; ② Promotes competition Brand benefits: ① Disclose product quality information in advance; ② Provide high-quality incentives for maintaining brand image
Chapter 17 Oligarchs
1. A few sellers’ market
Oligopoly: A seller's market (several companies) in which a few sellers offer similar or identical products. A few companies in an oligopoly market act according to strategy
The greater the number of firms in an oligopoly market, the closer it is to a competitive market (efficient level)
The smaller the number of companies in an oligopoly market, the closer it is to a monopoly market
Game Theory: A general analytical theory that studies how people behave under various decisions.
Duopoly: Two oligarchic sellers
Collusion: Agreement between firms regarding production and prices
Cartel: A group that agrees to act together Determine the price and divide the market (output when marginal revenue equals marginal cost) When collusion occurs, output is below the competitive level and equal to the monopoly level Without collusion, output is below the competitive level and above the monopoly level.
Antitrust laws prohibit
2. Cooperation Economics
Prisoner's Dilemma: Explain why cooperation is difficult when cooperation is beneficial to both parties. (For example, oligarchs all face a prisoner's dilemma and each adopts a possessive strategy, resulting in a decline in the overall situation)
Nash equilibrium (strategy combination): When the strategies of all other players are determined, the strategy chosen by a player is optimal (maximum own benefit)
Dominant strategy: No matter what strategy other players choose, it is the optimal strategy (unique) for one player
Oligopolistic collusion is the same as monopolizing output, price equality, and efficiency. The oligopoly does not collude, the output is greater than that of the monopoly, the price is lower than that of the monopoly, and the oligopoly efficiency is high Oligopoly is similar to monopoly. In long-term equilibrium, the price of oligopoly is higher than that of competitive market and the quantity of product is lower than that of competitive market.
3. Public policies targeting oligarchs
Restraints of Trade and Antitrust Laws
Controversial, it appears to reduce competition, but may actually have a legitimate business purpose
Chapter 18 Factors of Production Market
1. Factors of production market: inputs used to produce goods and services Labor, land, and capital are the three most important factors of production
labor most important factors of production
Production function: the relationship between the input amount of production items and the maximum output
Marginal product of labor: the increase in output caused by adding one unit of labor, holding other factors constant
Diminishing marginal product: The marginal product of a unit of input decreases as the amount of input increases
Marginal product value: the marginal product of the input multiplied by the price of the product, the added value
The slope of the production function is the marginal product of labor The value of the marginal product of labor is the same as the marginal product (decreasing) The marginal product value curve is also the labor demand curve equal to the wage (the decision-making principle for enterprises to choose the amount of labor)
Causes the labor demand curve to shift: product prices, technological changes (increasing labor demand →), supply of other factors
Causes shifts in the labor supply curve: changes in preferences, changes in available opportunities, immigration (Sudden increase in population due to immigration will cause wages to fall and rents for land and capital to rise)
labor market equilibrium
Wages will adjust spontaneously to balance supply and demand (invisible hand)
Wage (price) is equal to the value of the marginal product of labor
Capital (currency, products) The value of factors of production or business inputs
Purchase Price: The price paid to own an element indefinitely (land)
Lease price: the price paid for the use of a factor for a limited period (wage)
land
The rental price of a factor is equal to the marginal product value of the factor
Chapter 19 Income and Discrimination
1. Factors that determine equilibrium wages
Compensating wage differentials: wage differences caused by the non-monetary characteristics of different jobs (coal mine or night shift worker wages)
Human capital: the accumulation of investments in people, such as education (significant contribution to economic development) ① Increase the utilization rate of physical capital; ② Generate residual value growth rate; ③ Improve labor productivity Ability (signaling companies to hire), effort and opportunity (education, experience, age) The power of economic competition weakens discrimination based on race
superstar phenomenon
Every customer in the market enjoys products provided by the best producers
The optimal producer provides products to every customer at low cost
above-equilibrium wages
Union: An association of workers that negotiates wages and working conditions with employers
Strike: collective stoppage of work in protest to achieve certain interests (economic strike/political strike)
Efficiency wage: a higher than equilibrium wage paid to provide work efficiency
minimum wage laws
2. Discrimination: providing different opportunities to similar individuals with different race, religion, gender, age or other personal characteristics (reflecting prejudice against a certain social group) (low wages for workers are not only discrimination but also reflected in all aspects) Discrimination will continue if consumers pay to maintain discriminatory practices or if governments mandate discrimination
When regulators order a natural monopolist to set a price equal to marginal cost: 1. The natural monopoly price is lower than the average total cost of the enterprise; 2. Pricing cannot motivate the monopolist to reduce costs.
Due to differences in worker characteristics and job types, it is difficult to measure the impact of discrimination on labor market outcomes. The competitiveness of free entry and exit from the competitive market will eliminate wage differences caused by employer discrimination.
Advertisements without obvious information content actually convey information to consumers through the existence of the advertisement and expensive production costs (stars, high quality)
Patent and copyright laws are government monopolies created for the public good