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- https://socialsci.libretexts.org/Bookshelves/Economics/The_Economics_of_Food_and_Agricultural_Markets_(Barkley)/00%3A_Front_Matter/02%3A_InfoPageThe LibreTexts libraries are Powered by MindTouch ® and are supported by the Department of Education Open Textbook Pilot Project, the UC Davis Office of the Provost, the UC Davis Library, the Californ...The LibreTexts libraries are Powered by MindTouch ® and are supported by the Department of Education Open Textbook Pilot Project, the UC Davis Office of the Provost, the UC Davis Library, the California State University Affordable Learning Solutions Program, and Merlot.
- https://socialsci.libretexts.org/Bookshelves/Economics/The_Economics_of_Food_and_Agricultural_Markets_(Barkley)/03%3A_Monopoly_and_Market_Power/3.04%3A_Monopoly_CharacteristicsThis is because of the shape of the demand curve: it is profitable for the monopoly to reduce quantity produced to increase the price. Rather than shutting the less efficient plant down, the monopolis...This is because of the shape of the demand curve: it is profitable for the monopoly to reduce quantity produced to increase the price. Rather than shutting the less efficient plant down, the monopolist should produce some output in each plant, and set the MC of each plant equal to MR, as shown in the graph. To find the quantity to produce in each plant, the firm sets MC1=MC2=MCT to find the profit-maximizing level of output in each plant: Q1 and Q2.
- https://socialsci.libretexts.org/Bookshelves/Economics/The_Economics_of_Food_and_Agricultural_Markets_(Barkley)/04%3A__Pricing_with_Market_Power/4.07%3A_AdvertisingAdvertising is a huge industry, with billions spent every year on marketing products. Are these enormous expenditures worth it? The benefits of increased sales and revenues must be at least as large a...Advertising is a huge industry, with billions spent every year on marketing products. Are these enormous expenditures worth it? The benefits of increased sales and revenues must be at least as large as the increased costs to make it a good investment. In this section, the profit-maximizing level of advertising will be identified and evaluated.
- https://socialsci.libretexts.org/Bookshelves/Economics/The_Economics_of_Food_and_Agricultural_Markets_(Barkley)/01%3A_Introduction_to_Economics/1.01%3A_Introduction_to_the_Study_of_EconomicsFood and agricultural markets are in the news and on social media every day. Numerous fascinating and complex issues are the subject of this course: food prices, food safety, diet and nutrition, agric...Food and agricultural markets are in the news and on social media every day. Numerous fascinating and complex issues are the subject of this course: food prices, food safety, diet and nutrition, agricultural policy, globalization, immigration, agricultural labor markets, obesity, use of antibiotics and hormones in meat production, hog confinement, and many more. As we work through the course material this semester, please find examples of the economics of food and agriculture in the news.
- https://socialsci.libretexts.org/Bookshelves/Economics/The_Economics_of_Food_and_Agricultural_Markets_(Barkley)/06%3A_Game_TheoryThumbnail: From an evolutionary game theory the four alternative social forms of strategic interaction. (Public Domain; Pearson Scott Foresman via Wikipedia)
- https://socialsci.libretexts.org/Bookshelves/Economics/The_Economics_of_Food_and_Agricultural_Markets_(Barkley)/07%3A_Game_Theory_Applications/7.01%3A_Repeated_and_Sequential_GamesA game that is played only once is called a “one-shot” game. Repeated games are games that are played over and over again and actions are taken and payoffs received over and over again. Many oligopol...A game that is played only once is called a “one-shot” game. Repeated games are games that are played over and over again and actions are taken and payoffs received over and over again. Many oligopolists and real-life relationships can be characterized as a repeated game. Strategies in a repeated game are often more complex than strategies in a one-shot game, as the players need to be concerned about the reactions and potential retaliations of other players.
- https://socialsci.libretexts.org/Bookshelves/Economics/The_Economics_of_Food_and_Agricultural_Markets_(Barkley)/04%3A__Pricing_with_Market_Power/4.01%3A_Introduction_to_Pricing_with_Market_PowerIn economics, the firm’s objective is assumed to be to maximize profits. Firms with market power do this by capturing consumer surplus, and converting it to producer surplus. A monopoly finds the prof...In economics, the firm’s objective is assumed to be to maximize profits. Firms with market power do this by capturing consumer surplus, and converting it to producer surplus. A monopoly finds the profit-maximizing price and quantity by setting MR equal to MC. This strategy maximizes profits for a firm setting a single price and charging all customers the same price. In some situations, it is possible for a monopolist to increase profits beyond the single price monopoly solution.
- https://socialsci.libretexts.org/Bookshelves/Economics/The_Economics_of_Food_and_Agricultural_Markets_(Barkley)/01%3A_Introduction_to_Economics/1.05%3A_The_Motivation_for_and_Consequences_of_Free_TradeIf the price is lower than Pi in Figure \PageIndex3, consumers increase purchases of the good due to the Law of Demand, and producers decrease production of the good, following the Law of S...If the price is lower than Pi in Figure \PageIndex3, consumers increase purchases of the good due to the Law of Demand, and producers decrease production of the good, following the Law of Supply. The wheat market in the exporting nation is shown in the left panel, and the wheat market in the importing nation is shown in the right panel (Figure \PageIndex4).
- https://socialsci.libretexts.org/Bookshelves/Economics/The_Economics_of_Food_and_Agricultural_Markets_(Barkley)/03%3A_Monopoly_and_Market_Power/3.05%3A_Monopoly_PowerIf a firm is the only seller in an industry, then the firm is the same as the market, and the price elasticity of demand is the same for both the firm and the market. At some point, the average costs ...If a firm is the only seller in an industry, then the firm is the same as the market, and the price elasticity of demand is the same for both the firm and the market. At some point, the average costs will increase, but for firms characterized by economies of scale, the relevant range of the AC curve is the declining portion, of the left side of a typical “U-shaped” cost function.
- https://socialsci.libretexts.org/Bookshelves/Economics/The_Economics_of_Food_and_Agricultural_Markets_(Barkley)/05%3A__Monopolistic_Competition_and_Oligopoly/5.03%3A_Oligopoly_ModelsOligopoly is a market structure with few firms and barriers to entry. There is often a high level of competition between firms, as each firm makes decisions on prices, quantities, and advertising to ...Oligopoly is a market structure with few firms and barriers to entry. There is often a high level of competition between firms, as each firm makes decisions on prices, quantities, and advertising to maximize profits. Since there are a small number of firms in an oligopoly, each firm’s profit level depends not only on the firm’s own decisions, but also on the decisions of the other firms in the oligopolistic industry.
- https://socialsci.libretexts.org/Bookshelves/Economics/The_Economics_of_Food_and_Agricultural_Markets_(Barkley)/05%3A__Monopolistic_Competition_and_Oligopoly/5.02%3A_Monopolistic_CompetitionMonopolistic competition is a market structure defined by free entry and exit, like competition, and differentiated products, like monopoly. Differentiated products provide each firm with some market ...Monopolistic competition is a market structure defined by free entry and exit, like competition, and differentiated products, like monopoly. Differentiated products provide each firm with some market power. Advertising and marketing of each individual product provide uniqueness that causes the demand curve of each good to be downward sloping. Free entry indicates that each firm competes with other firms and profits are equal to zero on long run equilibrium.
