Midterm 2

• What is a monosony?

  Market with one buyer.
• What are the characteristics of an Oligopoly?

  Few large firms

  differentiated products

  Barriers to entry
• Monopolistic competition is less efficient than perfect competition as

  • P higher and Q is lower
  • ATC is higher
• What are the welfare impacts of Monopolistic competition?

  Consumer welfare reduced

  producer welfare increased

  DWL
• MVP curve is the firm-level demand curves for buyers
• In the short run monopolistic composition may happen, but in the long run it will be replaced by perfect competition
• Why does monopolisitc competiton not work?

  Positive economic profit attracts more producers, more producers means greater shift in D curve. MVP=MFC, AVP=AFC
• What is the main difference in curves for a monosony?

  MVP curve is also market demand for inputs since there is only one buyer
• What is a vertical market?

  A market with multiple\ levels
• D.r. is the final consumer demand curve
• S.r is the retail supply curve
• S.F is the farmer supply curve. primary producers
• D.F is the farmer demand curve of retailers
• D.r and S.f arise from the producer problem
• S.R is derived from farm product retailer input
• D.r. is derived from farm producer based on final customer WTP
• Supply functions S.r is an aggregated MC curve of MC.r
• Demand function D.f is argigated MVP r
• Why do marketing activities provide utility?

  because it adds value to the final product that consumer recieve
• What is the a farm share price?

  the difference in the retail price that goes into marketing of a commodity
• What is a marketing margin?

  the difference between the farm price and retailer price
• What is PTE?

  Price transmission equation