# how to print barcode in crystal report using vb.net PRINCIPLES OF ECONOMICS in Java Encoder Code 128C in Java PRINCIPLES OF ECONOMICS

116 PRINCIPLES OF ECONOMICS
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making the reasonable assumption that the rm wants to maximize its total pro ts or minimize its total losses. The general rule is that the rm should expand its output until MR = MC (as long as P exceeds AVC). A rm should expand its output as long as the addition to TR from an additional unit sold (its MR) exceeds the addition to TC to produce this extra unit (its MC). As long as MR > MC, the rm can increase its total profits by expanding output. The rm should not produce any unit for which MR < MC. If it did, it would be adding more to its TC than to its TR and its total pro ts would fall. Solved Problem 13.2 From Figure 13-2, set up a table indicating for each alternative demand curve, the best level of output, AC, pro t per unit, total pro ts, whether the rm produces or not, and whether it makes pro ts or losses (if TFC = \$65).
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Figure 13-2 Solution: Table 13.2 shows that with d5, the rm maximizes total profits. Table 13.2
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CHAPTER 13: Perfect Competition
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With d4, P = AC so that the rm breaks even. With d3, the rm minimizes total losses at \$33.80 by producing 65 units of output. If the rm stopped producing, it would incur losses equal to its TFC of \$65. Thus, by producing, the rm recovers all of its TVC plus part of TFC. With d2, the rm s total losses equal \$65 (by rounding) whether it produces or not. This is the shutdown point for the rm. With d1, the best level of output is 55 units where MR = MC). At this output, the rm s total losses would equal \$92.40. But by stopping production altogether and going out of business, the rm would lose only \$65 (its TFC). Thus, the rm would not produce at P = \$1.50. Solved Problem 13.3 Discuss the advantages of perfect competition. Solution: The most important advantages of the perfectly competitive form of market organization are that resources are utilized in the most ef cient way to produce the goods and services most wanted by society and that consumers pay the lowest possible prices. In long-run equilibrium, each perfectly competitive rm operates the optimum scale of plant at the optimum level of output. This is given by the lowest point of the SAC curve, which generates the lowest point of the LAC curve. Resources could not possibly be arranged more ef ciently. Furthermore, since the forces of competition eliminate all pro ts in the long run, consumers get the good or service at P = lowest LAC. Finally, since the price of the commodity measures the utility of the last unit of the commodity consumed, and this is equated to the MC of producing this unit, there is no better use of these resources. That is, the same resources could not be used to produce goods and services that give greater utility to consumers. Thus, perfect competition is used as the standard against which the ef ciency of other market forms is compared.
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Monopoly
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Monopoly De ned Pro t Maximization Price Discrimination Regulation of Monopoly True or False Questions Solved Problems
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Monopoly De ned
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Pure monopoly is the form of market organization in which there is a single seller of a commodity for which there are no close substitutes. Thus, it is at the opposite extreme from perfect competition. Monopoly may be the result of: (1) increasing returns to scale; (2) control over the supply of raw materials; (3) patents; or (4) government franchise. For example, electrical companies, telephone companies, and other public utilities usually have increasing returns to scale (i.e., falling long-run average costs) over a suf cient range of outputs as to enable a single rm to satisfy the entire market at a lower per-unit cost than two or more rms could. These natural monopolies usually operate under a