Use and Limitation of Concentration Measures in Identifying Market Structure
Concentration Ratio The concentration ratio is the sum of market shares covered by the largest N firms in a market. It is determined by finding the sales value for the largest firms and dividing it by the total market sales….
Pricing Strategy Under Each Market Structure
Pricing strategy can be described as the range of methods that the firms use to price their products and services. Companies and firms always set prices in accordance with the market structure in which they operate.
Long-run Equilibrium Under Each Market Structure
A firm is said to be at equilibrium if the marginal cost (MC) is equal to marginal revenue (MR), and that is the profit-maximizing level of output. Perfectly Competitive Markets In the long run, if firms under perfectly competitive markets…
Optimal Price and Output Levels Under Different Market Structures
An optimal price can be defined as the price at which a seller can make the highest profit possible; that is, the seller’s price is maximized. The rule of marginal output postulates that profit is maximized by producing an output,…
Supply Function Under Different Market Structures
A supply function is a mathematical expression that represents the relationship between the units of quantity of a product or service demanded, its price, and other deterministic factors such as input costs, prices of substitutes, etc. The dependent variable is…
Price, Marginal Cost, Marginal Revenue, Economic Profit, and the Elasticity of Demand
Marginal revenue (MR) and marginal cost (MC) affect how a company makes its production decisions. Marginal cost (MC) refers to the increase in cost that is occasioned by the production of an extra unit. It is the additional cost of…
Market Structures
Market structure can be defined as the characteristics of a market, which can either be competitive or organizational. Moreover, market structure outlines the nature of the competition and the pricing procedure in a market. Therefore, market structure describes the number…
Resampling
Resampling refers to the act of repeatedly drawing samples from the original observed data sample for the statistical inference of population parameters. The following are the two commonly used methods of resampling: Bootstrap and jackknife. Bootstrap In the bootstrap resampling…
Considerations and Biases in Sampling
Sampling considerations refer to the desirable characteristics that should always be taken into account when selecting a sample, which in turn increase the chances of accurately estimating the population parameters. In general, larger samples are preferred to smaller ones. This…
Confidence Intervals
Confidence interval (CI) refers to a range of values within which statisticians believe the actual value of a certain population parameter lies. It is different from from a point estimate which is a single, specific numerical value.
