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Business Economics & the Distribution of Income by Mind Map: Business Economics & the Distribution of Income
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Business Economics & the Distribution of Income

Profit Maximisation

Normal profit

Supernormal profit

Alternative goals

Cost and Revenues

Cost

Short run

Long run

Total product

Economies of scale

Diseconomies of scale

Revenue

Perfect Competition

Many buyers and sellers

No barriers to entry or exit

Identical products

Perfect information

No externalities

No economies of scale

Perfectly elastic demand curve

Shut down condition

Long-run

Efficiency

Surplus

Static efficiency

Dynamic efficiency

Perfect competition

Imperfect competition

Concentrated Markets

Concentration ratio

Growth

Outsourcing

Price Discrimination

IDENTICAL PRODUCT to DIFFERENT BUYERS at DIFFERENT PRICES for reasons unrelated to costs

Conditions

First degree (perfect price discrimination)

Second degree

Third degree

Monopoly

Barriers to entry

Strategic entry deterrence

Costs

Benefits

Oligopoly

Market dominated by a FEW PRODUCERS

Interdependence and uncertainly

Entry barriers

Product branding

Non-price competition

Competitive

Collusive

Kinked demand curve

Game theory

Contestable Markets

Theory of contestable markets: not the number of firms than influences conduct and performance, but the level of barriers to entry into an industry

Perfectly contestable: when the costs of entry and exit by potential rivals are 0

Evaluation

Increasing contestability of the markets

New node

Market Structure & Technology

Technology

First mover advantage: the advantages to the first firm that moves into a new market, creates a new product or adopts a new production process