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DEADWEIGHT LOSS: A net loss in social welfare that results because the benefit generated by an action differs from the foregone opportunity cost. This is usually the combination of lost consumer surplus and lost producer surplus, and indicates of the inefficiency of a situation. Deadweight loss is commonly illustrated by a market diagram if the quantity of output produced results in a demand price that exceeds the supply price. The triangle formed by the demand curve above, supply curve below, and quantity to the left is the area of deadweight loss. If demand price equals supply price, this triangle disappears and so too does the deadweight loss. Deadweight loss can result from government actions (taxes, price controls) or from market failures (externalities, market control)
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PERFECT COMPETITION, SHORT-RUN SUPPLY CURVE A perfectly competitive firm's supply curve is that portion of its marginal cost curve that lies above the minimum of the average variable cost curve. A perfectly competitive firm maximizes profit by producing the quantity of output that equates price and marginal cost. As such, the firm moves along its positively-sloped marginal cost curve in response to changing prices.
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ORANGE REBELOON
[What's This?]
Today, you are likely to spend a great deal of time searching for rummage sales trying to buy either a 50 foot extension cord or a combination CD player, clock radio, and telephone (with answering machine). Be on the lookout for small children selling products door-to-door.
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This isn't me! What am I?
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Ragnar Frisch and Jan Tinbergen were the 1st Nobel Prize winners in Economics in 1969.
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"There is a way to look at the past. Don't hide from it. It will not catch you - if you don't repeat it." -- Pearl Bailey, Singer and Actress
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ARP
Average Revenue Product
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