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ECO 201 Miami University Exam 3 Latest Update Questions with Correct Answers Download and Get A Perfect Score $6.49   Add to cart

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ECO 201 Miami University Exam 3 Latest Update Questions with Correct Answers Download and Get A Perfect Score

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ECO 201 Miami University Exam 3 Latest Update Questions with Correct Answers Download and Get A Perfect Score "shut down" price - Answer -when P=AVC=MC (min of AVC) -the lowest price at which the firm will still operate in the short run 2 part pricing - Answer --best for products with high fix...

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  • August 31, 2024
  • 6
  • 2024/2025
  • Exam (elaborations)
  • Questions & answers
  • ECO 201
  • ECO 201
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Eddiebeststudy
ECO 201 Miami University Exam 3 Latest
Update Questions with Correct Answers
Download and Get A Perfect Score
"shut down" price - Answer -when P=AVC=MC (min of AVC)

-the lowest price at which the firm will still operate in the short run

2 part pricing - Answer --best for products with high fixed costs

-charge annual one time access fee = CS

-charge per unit price = MC

2nd or 3rd degree price discrimination - Answer --groups of consumers are charged different
prices

ex: pricing on an aircraft, couponing, rebates, volume discounting

accounting profit = - Answer -total revenue - accounting total costs

accounting total cost - Answer -explicit costs only

antitrust policy - Answer --states that it is not illegal to be a monopoly, but it is illegal to
monopolize

-Federal Trade Commission (FTC) & Dept. of Justice (DOJ) enforce this policy through the courts

ATC = - Answer -AFC + AVC

average fixed cost - Answer -fixed cost per unit = FC / Q



continuously declines as output rises

Average total cost (ATC) - Answer -TC/Q or AFC + AVC

Average variable cost (AVC) - Answer -VC/Q, graphed as a U-shaped curve

best response - Answer -the strategy that maximizes the player's well-being, conditional on that
action being taken

commodity bundling - Answer --bundle products together and sell as a package price

-useful when consumers have different values for products sold by the same company
(cable/internet/phone)

, consumers are _______ _____ under monopoly - Answer -worse off

dominant strategy - Answer -the action that gives the player the best outcome regardless of what
the other player does

economic profit < 0 - Answer -firm's owner is doing worse than she/he could in his/her next best
alternative

economic profit = - Answer -total revenue - economic total costs

economic profit > 0 - Answer -firm's owner is doing better than she/he could in her/his next best
alternative

economic total cost - Answer -accounting total cost + implicit costs



economic total cost is opportunity cost

extensive form games - Answer -one player moves first

FC = - Answer -(ATC-AVC) x Q*

firms in monopolistic competition will maximize profit by producing all units where - Answer -MR
>= MC

fixed costs (FC) - Answer -costs that do not change as output changes (rent)... only exist in the
short run

game theory - Answer -technique used to understand strategic interactions between firms

Herfindahl-Hirschman Index (HHI) - Answer --a way to measure how competitive a market is

-the square of the percentage market share of each firm (top 50) summed = (firm 1 market)^2 + (firm
2)^2 + [....] (firm 50)^2

horizontal merger - Answer -a merger between 2+ firms providing essentially the same product or
service (ex: office max & staples or U.S. Air & american airlines)

how do the FTC & DOJ enforce the antitrust policy? - Answer --can charge a firm with being
anticompetitive

-can sue to prevent mergers (if mergers reduce competition "too much")

In a monopolized industry, prices will be ___________ & eq'm quantity will be _________ than if the
industry was competitive - Answer -higher, lower

in the long run all perfectly competitive firms earn a profit of ________ - Answer -zero

in the long run, monopolistically competitive firms have a profit of ______ - Answer -zero

in the short run... - Answer -Q=f(L) because capital is fixed

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