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COLLUSION PRODUCTION ANALYSIS: To avoid competition, oligopolistic firms are occasionally inclined to cooperate through collusion. Collusion occurs when two or more oligopolistic firms jointly agree to control market prices and quantity and to generally act like a monopoly. Colluding firms set a price and produce a quantity that maximizes industry-wide economic profit, the same price and quantity that would be selected by a profit-maximizing monopoly. Once the industry-wide price and production are determined, each individual firm produces the quantity of output that equates the marginal cost of the firm to the marginal revenue for the industry.;collusion, efficiency;monopoly, short-run production analysis;game theory;oligopoly;collusion;explicit collusion;implicit collusion;cartel;market control;oligopoly, behavior
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AVERAGE FIXED COST Total fixed cost per unit of output, found by dividing total fixed cost by the quantity of output. When compared with price (per unit revenue), average fixed cost (AFC) indicates whether or not a profit-maximizing firm should shutdown production in the short run. Average fixed cost is one of three average cost concepts important to short-run production analysis. The other two are average total cost and average variable cost. A related concept is marginal cost.
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Fact 5: Our Necessary EvilIt's time to give up our attempts to enter the Merciless Monolithic Media Masters Cable Television Company, Inc. office and take care of other pressing business -- taxes. The next stop on our excursion through the economy is the Shady Valley City Hall, where we need to momentarily, and begrudgingly, pause so that I may pay my semi-annual property tax bill. This is the least enjoyable stop -- at least for me -- on our journey. Grumble. Grumble. Grumble. Of course I hate to pay taxes! But, then again, who doesn't? Taxes are one of those annoying and evil necessities of life that simply can't be avoided. Or can they? Do we have to pay taxes? A quick visit to a bookstore will produce dozens of books telling you how to avoid taxes by investing here or buying this or doing that. Better yet, if we could rid ourselves of the inefficient, bloated, incompetent, do-nothing government, then you and I wouldn't have to pay taxes. Right? We could use our hard-earned income to buy stuff that we want, rather than letting the inefficient, bloated, incompetent, do-nothing government spend it on stuff that we don't want, don't know anything about, and will never need. Right?
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PURPLE SMARPHIN
[What's This?]
Today, you are likely to spend a great deal of time touring the new suburban shopping complex wanting to buy either a replacement remote control for your television or a replacement nozzle for your shower. Be on the lookout for infected paper cuts.
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This isn't me! What am I?
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On a typical day, the United States Mint produces over $1 million worth of dimes.
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"No amount of business school training or work experience can teach what is ultimately a matter of personal character. " -- Truett Cathy, Chick-fil-A Inc. founder
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OAPEC
Organization of Arab Petroleum Exporting Countries
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