1. ANTITRUST Music : Gustav Mahler, Symphony No. 1 (1888) Performed by Bavarian Radio Symphony Orchestra, Conductor: Rafael Kubelik (1968)

2. FACTORS AFFECTING DEMAND PERSONAL TASTE INCOME PRICE OF COMPLEMENTARY GOODS PRICE OF SUBSTITUTES

3. DEMAND

6. TYPES OF PRODUCER COSTS FIXED v.VARIABLE COSTS TOTAL v. AVERAGE COSTS MARGINAL COST

7. FIXED v. VARIABLE COSTS FIXED COSTS: DO NOT VARY IN SHORT RUN VARIABLE COSTS

8. FIXED v. VARIABLE COSTS FIXED COSTS: DO NOT VARY IN SHORT RUN VARIABLE COSTS: VARY WITH LEVEL OF PRODUCTION

9. TOTAL v. AVERAGE COST TOTAL COST: ALL COSTS ASSOCIATED WITH PRODUCT LINE AVERAGE COST

10. TOTAL v. AVERAGE COST TOTAL COST: ALL COSTS ASSOCIATED WITH PRODUCT LINE AVERAGE COST: MEAN COST PER ITEM PRODUCED

11. TOTAL v. AVERAGE COST TOTAL COST: ALL COSTS ASSOCIATED WITH PRODUCT LINE AVERAGE COST: MEAN COST PER ITEM PRODUCED –AVERAGE TOTAL COST –AVERAGE VARIABLE COST

12. MARGINAL COST = ADDITIONAL COST OF PRODUCING ONE MORE UNIT

13. ALL COSTS INCLUDE “NORMAL” PROFIT

14. SUPPLY CURVE = MARGINAL COST CURVE FOR INDUSTRY AS A WHOLE

15. SUPPLY & DEMAND

16. FACTORS AFFECTING SUPPLY CURVE TECHNOLOGICAL CHANGE

17. FACTORS AFFECTING SUPPLY CURVE TECHNOLOGICAL CHANGE INPUT PRICES

18. SUPPLY & DEMAND

19. PRODUCERS’ GOAL MARGINAL REVENUE = MARGINAL COST

20. PRODUCERS’ GOAL IN COMPETITIVE MARKET MARGINAL REVENUE = PRICE = MARGINAL COST

21. SUPPLY & DEMAND

22. OPTIMUM CONDITIONS FOR COMPETITIVE EQUILIBRIUM FUNGIBLE PRODUCT SUPPLIERS CAN’T AFFECT EACH OTHERS PRICING/OUTPUT MOBILITY/EQUALITY OF RESOURCE AVAILABILITY GOOD INFORMATION/LOW TRANSACTION COSTS

23. OPTIMUM CONDITIONS FOR COMPETITIVE EQUILIBRIUM FUNGIBLE PRODUCT SUPPLIERS CAN’T AFFECT EACH OTHERS PRICING/OUTPUT MOBILITY/EQUALITY OF RESOURCE AVAILABILITY GOOD INFORMATION/LOW TRANSACTION COSTS

24. OPTIMUM CONDITIONS FOR COMPETITIVE EQUILIBRIUM FUNGIBLE PRODUCT SUPPLIERS CAN’T AFFECT EACH OTHERS PRICING/OUTPUT MOBILITY/EQUALITY OF RESOURCE AVAILABILITY GOOD INFORMATION/LOW TRANSACTION COSTS

25. OPTIMUM CONDITIONS FOR COMPETITIVE EQUILIBRIUM FUNGIBLE PRODUCT SUPPLIERS CAN’T AFFECT EACH OTHERS PRICING/OUTPUT MOBILITY/EQUALITY OF RESOURCE AVAILABILITY GOOD INFORMATION/LOW TRANSACTION COSTS

26. OPTIMUM CONDITIONS FOR COMPETITIVE EQUILIBRIUM FUNGIBLE PRODUCT SUPPLIERS CAN’T AFFECT EACH OTHERS PRICING/OUTPUT MOBILITY/EQUALITY OF RESOURCE AVAILABILITY GOOD INFORMATION/LOW TRANSACTION COSTS

27. SUPPLY AND DEMAND

28. SUPPLY & DEMAND

32. ELASTICITY (SENSITIVITY TO PRICE CHANGES) % CHANGE IN OUTPUT NECESSITATED BY 1% CHANGE IN PRICE

33. ELASTICITY > 1 DEMAND IS ELASTIC CONSUMERS RESPONSIVE TO PRICE CHANGES GOOD SUBSTITUTES EXIST

34. ELASTICITY < 1 DEMAND IS INELASTIC CONSUMERS UNRESPONSIVE TO PRICE CHANGES FEW GOOD SUBSTITUTES

35. TOTAL REVENUE/DEMAND

41. MONOPOLY: PROBLEMS HIGH PRICES LOWER OUTPUT WEALTH TRANSFER (?) DEADWEIGHT LOSS

42. BARRIERS TO ENTRY LIMITED ACCESS TO KEY RESOURCES GOVERNMENT REGULATION HIGH FIXED COSTS BRAND LOYALTY

43. MONOPOLY: PROBLEMS HIGH PRICES LOWER OUTPUT WEALTH TRANSFER (?) DEADWEIGHT LOSS PREDATORY CONDUCT RENT-SEEKING BEHAVIOR