What is a PP and CC curve?

PP Curve is like a demand cure. P = C + 1/(b + n) As more varieties available, n rises and P falls. Slopes down. CC Curve is like a supply curve. Slopes up because increasing n raises average costs.

Why is the CC curve is upward sloping?

The upward-sloping curve CC tells us that the more firms there are in the industry, the higher the average cost of each firm. This also makes sense: If the number of firms increases, each firm will sell less, so firms will not be able to move as far down their average cost curve.

Is monopolistic competition and imperfect competition the same?

Monopolistic competition is a type of imperfect competition such that there are many producers competing against each other, but selling products that are differentiated from one another (e.g. by branding or quality) and hence are not perfect substitutes. Unlike perfect competition, the firm maintains spare capacity.

Why is the PP curve downward sloping in markets Characterised by monopolistic competition?

A monopolistically competitive firm faces a demand for its goods that is between monopoly and perfect competition. In contrast, the demand curve, as faced by a monopolist, is the market demand curve, since a monopolist is the only firm in the market, and hence is downward sloping.

What are the assumptions of Monopoly?

Key Points

• A monopoly market is characterized by the profit maximizer, price maker, high barriers to entry, single seller, and price discrimination.
• Monopoly characteristics include profit maximizer, price maker, high barriers to entry, single seller, and price discrimination.

What causes LAC to rise?

In other words, beyond a certain point a firm experiences net diseconomies of scale. After a certain sufficiently large size these inefficiencies of management more than offset the economies of scale and thereby bring about an increase in the long-run average cost and make the LAC curve upward-sloping after a point.

Why is economies of scale long-run?

Economies of scale exist because the larger scale of production leads to lower average costs. The economies of scale curve is a long-run average cost curve, because it allows all factors of production to change.

What is the difference between monopoly and monopolistic competition?

monopoly: A market where one company is the sole supplier. Monopolistic competition: A type of imperfect competition such that one or two producers sell products that are differentiated from one another as goods but not perfect substitutes (such as from branding, quality, or location).

What is monopoly and features?

A monopoly market is characterized by the profit maximizer, price maker, high barriers to entry, single seller, and price discrimination. Monopoly characteristics include profit maximizer, price maker, high barriers to entry, single seller, and price discrimination.

What is the production possibilities curve (PPC)?

In this lesson summary, review the key concepts, key terms, and key graphs for understanding opportunity cost and the production possibilities curve. The Production Possibilities Curve (PPC) is a model used to show the tradeoffs associated with allocating resources between the production of two goods.

Why PPC is concave in shape?

● PPC is concave-shaped because more and more units of one commodity are sacrificed to gain an additional unit of another commodity. ● However, if there is unemployment or inefficiency in resource utilisation, then we can produce at any point inside the PPC.

What is the difference between inefficient and efficient points on PPC?

Points on the interior of the PPC are inefficient, points on the PPC are efficient, and points beyond the PPC are unattainable. The opportunity cost of moving from one efficient combination of production to another efficient combination of production is how much of one good is given up in order to get more of the other good.

What does the production possibility curve of consumer equilibrium show?

The production possibility curve also shows the choice of society between two different products. You might want to know: What is Consumer Equilibrium? ● It is downward sloping and concave to the point of origin.