Accounting profit = revenue-cost
Economic profit = accounting profit-hidden cost.
Cost = fixed cost+variable cost
Average cost = average fixed cost+average variable cost
With the increase of output, the average fixed cost AFC will become smaller and smaller.
The AFC curve shows a downward state.
The products produced by the resources of each unit are called marginal products.
In the initial stage, resources were reasonably allocated, so marginal product increased continuously and then decreased continuously.
For example:
When the restaurant recruits the first chef, it is very efficient and can cook a lot of dishes.
Recruit the second, the marginal food will be higher, because two chefs can work together, which is more efficient.
However, after too many people are recruited in the small kitchen, the food brought by one more chef will definitely decrease, and may even become negative.
Average product refers to the average product brought by resources.
AP equals product divided by resources.
When MP > AP, AP is increasing;
When MP < AP, AP shows a downward trend.
The intersection of MP and AP is the highest point of AP.
Variable cost refers to the cost that rises with the increase of output.
Marginal cost refers to the cost of each additional product.
Due to the rational utilization of resources, MC decreased in the initial stage and then increased continuously.
When MC < AC, AC decreases;
When MC > AC, AC increases.
The intersection of MC and AC is the lowest point of AC.
As the output q becomes larger:
Low AC is called economies of scale. Constant AC is called constant income.
AC becomes higher, which is called diseconomies of scale.
Perfect definition of competitive market:
1. There are enough buyers and sellers.
2. There is no difference between products.
3. Market access
Companies can only accept market prices, that is, price recipients.
In a perfectly competitive market, the price is fixed.
Every time a seller sells one more product, the income equals the price.
Average income is also equal to price.
So P = MR = AR = demand.
For the seller, the marginal revenue is the income that can be obtained for each additional product sold.
When Mr > MC, the seller has a profit.
When MR=MC, the seller's profit is the largest.
The seller will definitely go to MR=MC when deciding the production quantity.
Find the company's ATC after determining the production Q.
If the market price p is greater than ATC, the company will make money.
Price -ATC= unit profit
Unit profit multiplied by Q= total profit
In the short term, if P < ATC, the company may not be delisted, because it may be P > AVC.
For example:
In a bad coffee shop, customers may have such questions:
Why isn't this empty shop closed?
Suppose the market price of a cup of coffee is 30 yuan, and the variable cost is only 10 yuan.
Then, it is profitable to sell this cup of coffee alone, but after integrating the fixed costs, the current 30 pieces are lower than the average total cost.
If P < AVC, the company should withdraw from the market and close down.
If the company is profitable in the short term, it will attract new operators to enter the market.
When there are more sellers, the supply moves to the right.
The market price was pulled down.
Finally, P=ATC.
If the company loses money in the short term, it will withdraw from the market.
Then the seller decreases and the supply moves to the left.
The market price was pulled up.
Finally, P=ATC.
Definition of complete monopoly:
1. There is only one seller.
There is no substitute for the products produced.
3. Serious obstacles
4. Monopolists have the ability to set prices.
Obstacle type:
1. Legal obstacles
Such as patent rights
2. Natural monopoly
The company is relatively large and the fixed cost is very large.
It is very, very difficult for new producers to enter, such as airlines.
3. Resource barriers
This means that other companies can't find or buy the resources needed by an industry.
Under the complete monopoly, the market price is no longer fixed.
When the price is high, the demand is low;
When prices are low, demand is high.
The higher the q, the lower the AR.
The lower the q, the higher the AR.
Therefore, the AR curve of monopoly market presents a decreasing state.
AR decreases, so Mr < ar.
Monopoly enterprises will still look for MR=MC, which is the most profitable point.
Then according to the output q at this time, find the intersection with the demand curve and find the corresponding monopoly price p.
Unit monopoly profit.
Unit monopoly profit multiplied by Q= total monopoly profit.
The direct impact of monopoly:
It raises commodity prices, reduces turnover Q, reduces consumer surplus and increases producer surplus.
At the same time, unnecessary losses also came into being.
Definition of price discrimination:
1. The pricing of the same commodity is different.
2. Divide consumers into different categories.
For example:
The same is eating, some people eat normally and check out normally. Some people buy group coupons in advance, eat the same meal and spend less money.
Merchants discriminate against greedy people and give them the opportunity to buy group coupons. Originally, these people didn't want to come to dinner, but they came when they saw that the group purchase coupons were cheap.
Then I came.
At the same time, merchants discriminate against people who are not cheap, and there is no feeling of paying the bill normally.
As a result, businesses sold more products, and everyone made a profit.
Price discrimination increases the profits of monopolists and further reduces the surplus of consumers.
Definition of monopolistic competition:
1. There are relatively many enterprises.
2. There are differences between products.
3. The obstacles are not serious
Monopoly profits will attract new producers to enter the market.
In the long run, the price equals ATC and the profit equals zero.
Definition of oligopoly:
1. Very few monopolists.
2. The products are different
3. Serious obstacles
Oligarches are independent of each other.
Game theory means that both sides make strategies for their own best interests.
When one party adopts a fixed strategy to achieve its best interests without considering the strategy of the other party, it is called an advantage strategy.
The dominant strategy will form Nash equilibrium Nash equilibrium.
When colluding in pricing, both parties can get higher profits at the same time.
Cartel is a relatively large oligopoly organization with serious internal collusion and market monopoly.
MRP refers to marginal revenue products, and refers to the revenue brought by each product.
Marginal products refer to commodities produced by unit resources.
MP multiplied by product price is MRP.
In a perfectly competitive market, commodity prices are fixed.
MP increases first and then decreases continuously, so MRP is the same.
MRC refers to marginal resource cost, that is, how much production factor cost each product will spend.
Enterprises always hope that the income per unit factor of production is as high as possible, and at the same time hope that the cost is as low as possible.
MRP=MRC is the best position.
Derived demand means that the demand of enterprises to hire labor is based on the demand of consumers for goods.
When the market demand for goods becomes higher, enterprises will have the motivation to pursue profits and buy more factors of production.
Marginal product brought by labor and marginal product brought by equipment are not necessarily the same.
MP/Price has higher value and is more beneficial to the company.
So when the company decides whether to buy labor or plant equipment, it will consider whose MP/P is higher.
In a perfectly competitive factor market, MRC remains unchanged and presents a horizontal line.
Under the monopoly of the labor market, enterprises set lower wages and employ less labor.
When the labor supply is large, the wages given by enterprises are low;
When the labor supply is small, the construction site given by the enterprise is high.
Therefore, the wage curve is on the rise.
The wage curve represents the average wage level, so the marginal revenue cost (that is, the labor paid for each additional labor force) is deduced.
Capital) must be greater than the average wage. (When the average value rises, the average value > the edge value)
The average wage curve can be understood as the supply curve of the labor market.
According to MRP=MRC, monopoly enterprises decide the number of labor to be employed, which is the position of maximizing profits.
Then according to this amount of labor, find the intersection with the supply curve and determine the monopoly wage.
Public goods are not exclusive and competitive.
This means that anyone can use public goods, and the use of others will not affect your use.
For example:
The roads that are not crowded can be used by everyone.
Public goods may be followed by the problem of "rubbing".
For example:
Someone wants people in the community to pay for tickets to see the fireworks show.
However, even if people nearby don't buy tickets, they can still see the fireworks show from a distance.
Therefore, most public goods are provided by the government.
When a certain commodity and service can bring positive benefits to the whole society, it is called bringing positive externalities.
For example:
Someone is planting flowers in his yard. The purpose of TA is to grow flowers, see the beauty and smell the fragrance by yourself.
But the fact is that people nearby can smell the flowers, and it is possible that many people will become happy.
When there are positive externalities, the government should encourage them.
Positive externalities represent the increase of overall interests.
The demand curve represents marginal revenue and the supply curve represents marginal cost.
The additional social benefits brought by positive externalities can be regarded as an overall upward shift in the demand curve.
Demand rises and q increases.
The increased q is the best position.
The government should subsidize the buyer or seller to make the demand or supply move to the right to achieve the optimal Q, which can also be called social Q.
When negative externalities occur, additional social costs can be regarded as an overall upward shift in the supply curve.
Supply goes up and Q goes down.
The lowered q is the best position.
The government should collect more taxes or issue more tickets to move the supply to the left to achieve the optimal Q, which can also be called social Q.
The shaded part in the figure below shows the unnecessary losses caused by positive externalities and negative externalities respectively:
Average tax rate: tax amount/income
According to different tax rate algorithms, there are three kinds of common taxes.
1. Progressive tax.
With the increase of income, the average tax rate is higher.
For example, personal income tax is taxed separately according to different files.
2. Decreasing tax.
With the increase of income, the average tax rate decreases.
Example: consumption tax.
There are two people with an annual income of 500 thousand, 50 thousand
Assuming that the cost of a commodity is 1 000 yuan and the consumption tax rate is 10%, the tax amount is 1 000 yuan.
At this time, the average consumption tax rate of the rich is 1000/500000, and that of the poor is 1000/50000.
Conclusion: With the increase of income, the average consumption tax rate decreases.
3. Proportional tax.
The tax rate is fixed.
Reasons for income inequality:
1. instinct
2. Education level and training level
3. Discrimination
Step 4: Preference
Preference is not discrimination. For example, some people are lazy and others are diligent.
5. Monopoly
6. Luck
Lorenz curve Lawrence curve is used to measure the rationality of income distribution.
The horizontal axis is the number of families, and the vertical axis is income.
Gini coefficient is used to measure the rationality of distribution.
The calculation of Gini coefficient should be based on Lawrence curve.
The greater the Gini coefficient, the more unreasonable the wealth distribution of a country.
The government has a certain obligation to redistribute wealth to a certain extent and avoid unreasonable distribution.