Microeconomics I partie 3/9
Fiches de révision
Fiches de révision
Set of flashcards Details
| Flashcards | 40 |
|---|---|
| Language | English |
| Category | Macro-Economics |
| Level | University |
| Created / Updated | 06.06.2019 / 02.10.2023 |
| Licencing | Attribution-NonCommercial-NoDerivs (CC BY-NC-ND) (Unversité de Genève, cours de Pr. Monika Mrazova) |
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A market is Pareto efficient if
it achieves the maximum possible total gains-to-trade
Otherwise a market is Pareto inefficient
What if a profits tax is imposed?
I If the monopolist faces a constant-elasticity demand
Application: Impact of Taxes on a Monopolist
Consider a monopolist with constant marginal cost. What
happens to the market price when a quantity tax is imposed?
I If the monopolist faces a linear demand
Markup pricing
Example: Linear Demand and Monopoly
Suppose that the monopolist faces a linear demand curve: p(y) = a - by
Suppose the monopolist’s marginal cost of production is constant, at $k/output unit
How does the price charged by the monopolist vary with the own-price elasticity of demand?
