sfd

1. Using economic vocabulary, describe the
cost structures of these two different firms:
A. Prices to consumers?
B. Positive for society?
C. Negatives?
D. Food stamp effect?

2. Types of economic efficiency

3. Efficiency vocabulary
• Allocative efficiency
• MB > MC what should we do?
• MB < MC what should we do?
• MB = MC best situation, using our allocations
“best”
• Perfect Competition

4. Efficiency vocabulary
• Allocative efficiency
• Monopoly
• Monopolistic Comp
• NO

5. Efficiency vocabulary
• Productive efficiency
• Lowest cost production
• Min of ATC

6. Efficiency vocabulary
• Dynamic efficiency
• SUPER Normal Profit
• Reinvest into lower
costs

7. • Productive Eff.
• Productive Eff.
• Dynamic Eff.
X
Y
Z
C

8. • Productive Eff.
• Productive Eff.
• Dynamic Eff.
B
CD

9. Which prices
would result in:
Productive Eff.
Productive Eff.
Dynamic Eff.

13. PAGES 410-411
• 3 quick debates
• How should we define this issue?
• Efficiency? Production? Cost?
• Is monopoly efficient?
• Is monopoly fair?
• Is rent seeking justified?