Review for Exam #3
Date: April 24, 1996
Topics: Chapters 12, 13, 15, (16 if covered in class), All Homework
and Lecture material
Profit Maximization:
Def'n, Eq'n,
Profit Max Rule / Decision
A Firm in a Competitive Industry
Assumptions / Characteristics
Demand Curve facing the firm
Profit Max Rule
Short Run Supply Curve
"What if games" (Sect 12.3 Own your own)
Graphically: Profits, Supply, Shut-down etc.
MRPL , ARPL def'n (in words and eq'n) and graphically
Competitive Industry
Market Supply Curve -
How to find it (words, Graphically, mathematical idea)
Equilibrium in the long and short run (Graphically)
"What if games" w/ mkt demand.
follow the changes in a representative firm and the industry.
Increasing/Constant/Decreasing Returns to Scale
and the LRAC curve
Graphical relationship btwn LRAC, SRAC(K), SRMC(K)
Incidence of Per-Unit Tax (Graphically and mathematically)
Monopoly Market
Demand curve facing the firm.
Profit max rule
Comparison to Perfect competition.
Welfare issues
Price Discrimination
Natural Monopolies