Firm's Markup and its Relation to Market Competition
A firm's profit-maximizing price is set as a markup over its marginal cost. The size of this markup is determined by the degree of competition in the product market. Specifically, the markup is inversely proportional to the price elasticity of demand for the firm's product; a lower elasticity, which corresponds to less competition, allows for a higher markup.
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Introduction to Macroeconomics Course
Ch.2 Unemployment, wages, and inequality: Supply-side policies and institutions - The Economy 2.0 Macroeconomics @ CORE Econ
The Economy 2.0 Macroeconomics @ CORE Econ
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Ch.4 Inflation and unemployment - The Economy 2.0 Macroeconomics @ CORE Econ
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