by TheBusinessProfessor | Feb 23, 2025 | Economic Analysis & Monetary Policy
What is Market Structure? Market structure concerns how competitive is the industry. That is, it concerns the following factors: Market power of each firm (suppliers and buyers); Substitute products; Barriers to entry; Competitive rivalry It also concerns the number...
by TheBusinessProfessor | Feb 23, 2025 | Economic Analysis & Monetary Policy
How do Technology Shifts affect the Long-Run Average Cost Curve? New developments in production technology can shift the long-run average cost curve in ways that can alter the size distribution of firms in an industry. New production technologies do not inevitably...
by TheBusinessProfessor | Feb 23, 2025 | Economic Analysis & Monetary Policy
How does the Long-Run Average Cost Curve Affect Industry Competitors? The shape of the long-run average cost curve affects the size and number of firms that will compete in an industry. Where the LRAC curve has a flat-bottomed area of constant returns to scale....
by TheBusinessProfessor | Feb 23, 2025 | Economic Analysis & Monetary Policy
How do Costs relate to Diminishing Marginal Productivity? Adding additional factors of production (such as workers) generally leads to higher productivity. At some point, adding additional workers begins to add less and less productivity. Each factor of input has an...
by TheBusinessProfessor | Feb 23, 2025 | Economic Analysis & Monetary Policy
What is the Shape of the Average Long-Run and Short-Run Cost Curves? While in the short run firms are limited to operating on a single average cost curve (corresponding to the level of fixed costs they have chosen), in the long run when all costs are variable, they...
