Price Discrimination in Economics
Price descrimination as the different price charged by the seller (firm) to different buyers. It is an activity by a firm with at least some monopoly power to charge different prices to different buyers in…
Non-Collusive Oligopoly (Kinked Demand Curve Model)
First read the ⇒ Collusive Oligopoly Non-Collusive Oligopoly In the non-collusive oligopoly market, firms do not have the information about the exact strategy of any of the rival firms. It is a situation like a…
Price and Output Determination Under Monopolistic Market
It is the market structure where there is a large number of buyers and sellers and a differentiated but closed substitute product. Though the number os buyers and sellers is large, there is some degree…
Price and Output Determination Under Monopoly Market
It is the market structure where there is a single seller and a large number of buyers, a unique product that does not have any close substitutes, and barriers to entry. Being a single supplier,…
Price and Output Determination Under Perfect Market
Perfect Market It is the market structure where a large number of buyers and sellers, with homogeneous products, are present. The number of buyers and sellers is so large that there is a complete absence…
Modern Theory of Cost
Proposed by or based on George Stigler (in 1939) The traditional theory of cost was criticized both theoretically and empirically by the modern theory, which argues that the average cost, both in the short run…
Cost Approach vs Resource Approach of Production Planning
1) Cost Approach of Production Planning: This approach of production planning aims to minimize the cost. If the output is given ot pre-determined, then the objective of the firm is to minimize the cost and…
Joint Product Pricing
If a firm produces two or more products jointly, then the pricing of these different products is the joint product pricing. Under the joint pricing, it is difficult to find the cost of the individual…
Economies of Scope and Economies of Scale
What is Economies of Scale? Economies of scale are defined as the benefits to the firm in the form of a reduction in per-unit cost due to the large scale or expansion of the business.…