Imperfect Competition Relationship between AR & MR Curves Proof

To acquaint the students with the concepts of microeconomics dealing with consumer behavior.

It includes demand function, law of demand, derivation of individual and market demand curves, shifting of the demand curve, and elasticity of demand.

Perfectly Competitive market refers to a market structure with assumptions such as many buyers/sellers, homogenous products, perfect information, free entry/exit, and profit maximization.

<p>The utility maximization conditions refer to the conditions where a consumer maximizes satisfaction or utility subject to a budget constraint.</p> Signup and view all the answers

<p>Monopoly is a market structure with a single seller, no close substitutes, and high barriers to entry. Equilibrium in monopoly is where marginal cost equals marginal revenue to maximize profits.</p> Signup and view all the answers

<p>Monopolistic Competition is a market structure with many firms, product differentiation, easy entry/exit, and some degree of market power.</p> Signup and view all the answers

<p>Oligopoly is a market structure with a few interdependent firms. Collusive Oligopoly involves firms cooperating to set prices, like a cartel in the oil industry.</p> Signup and view all the answers

<p>The law of demand states that when the price of a commodity falls, the quantity demanded of that commodity rises, and vice versa.</p> Signup and view all the answers

<p>Giffen goods are inferior goods where the increase in price leads to an increase in demand due to the stronger income effect than the substitution effect.</p> Signup and view all the answers

<p>Conspicuous goods, like diamonds and luxury cars, are purchased more at higher prices as they serve as status symbols to display wealth.</p> Signup and view all the answers

<p>The law of demand does not apply in the case of expectations of a change in the price of the commodity, especially in cases of speculation.</p> Signup and view all the answers

<p>AR = MR or AR = MR(e/(e-1)) or MR = AR ((e-1)/e)</p> Signup and view all the answers

<p>Total Revenue = Average Revenue × Output</p> Signup and view all the answers

<p>BCD = RAB</p> Signup and view all the answers

<p>The relationship is expressed in the formula AR = MR or AR = MR(e/(e-1)) or MR = AR ((e-1)/e)</p> Signup and view all the answers