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  • 24210 74771 / 24210 74776
  • Fax: 242107-4772
  • 28hs Octovriou 78, Volos, P.C. 38333

Review

Course outline
1. THEORY OF COST
(a) Short-Run: Production with one variable input, Law of diminishing marginal physical returns, Three stages in production, Derivation of the average fixed cost, average total cost, average variable cost and marginal cost
(b) Long-Run: Production with two variable inputs, Isoquant curves, Marginal rate of technical substitution, Isocost curves, Expansion curve, Optimal Combination of Resources – minimizing cost subject to a given output, input demand functions, Returns to scale and the function coefficient, Long-run total cost elasticity, Relation between the theory of the cost in the long-run and the short-run, Shape of the long-run average cost

2. PERFECT COMPETITION: Conditions for defining perfect competition, Short-run equilibrium of a firm in a perfectly competitive market, Short-run equilibrium and supply curve in a perfectly competitive industry, Demand-Supply analysis, Long-run equilibrium in a perfectly competitive market, Long-run industry supply curve, Constant and Increasing cost industries

3. MONOPOLY: Definition, Demand under monopoly, Short-run equilibrium, Market power and Lerner Index, Monopoly supply in the short-run, Long-run equilibrium in a single-plant monopoly, Comparison with perfect competition, Special topics in monopoly theory (Multiplant monopoly in the short-run, Price discrimination, Bilateral monopoly)

4. MONOPOLISTIC COMPETITION AND OLIGOPOLY: Product differentiation, Industries and product groups, Two demand curves, Classical solutions to the duopoly problem – Cournot case, Mathematical approach to a modified Cournot model, Edgeworth case, Stability in Oligopoly Markets – Chamberlin and Sweezy solutions, Cartels and profit maximization, Cartels and market sharing

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