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LONG-RUN ADJUSTMENT: The combined adjustment of an industry and of each firm in the industry to an equilibrium condition that based on (1) profit maximization when all inputs are variable and (2) the entry and exit of firms. The complete adjustment is undertaken by both perfect competition and monopolistic competition. There are two parts of this adjustment process. One is the adjustment of each firm to the appropriate factory size that maximizes long-run profit. The other is the entry of firms into the industry or exit of firms out of the industry, to eliminated economic profits or economic losses. The end result of this long-run adjustment is different for the two market structures based on the fact that perfect competition has equality between price and marginal revenue, while monopolistic competition does not.
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CAPTURE THEORY OF REGULATION The notion that a government agency established to regulate an industry for the benefit of society acts instead for the benefit of the industry. In effect, the government agency is "captured" by the industry it is regulating. The capture theory of regulation indicates that government regulator acts as the decision-making "head" of a now monopolized industry. This is achieved by a "rotating door" between the government agency and the industry, with members of the regulating agency being former and future employees of the industry. Rather than promoting efficiency, the regulating agency creates an inefficient allocation of resources.
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WHITE GULLIBON
[What's This?]
Today, you are likely to spend a great deal of time searching for rummage sales wanting to buy either a T-shirt commemorating the 2000 Olympics or a genuine fake plastic Tiffany lamp. Be on the lookout for letters from the Internal Revenue Service.
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This isn't me! What am I?
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The first paper currency used in North America was pasteboard playing cards "temporarily" authorized as money by the colonial governor of French Canada, awaiting "real money" from France.
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"Success is the ability to go from one failure to another with no loss of enthusiasm." -- Sir Winston Churchill
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AOM
Australian Options Market
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