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Shutdown rule - PowerPoint PPT Presentation

Basic Market Concepts

Basic Market Concepts. Shutdown Rule P > AC, making a ? AVC < P < AC, SR loss, maybe OK P < AVC, shutdown. Profit Maximizing Quantity where MC = MR Market Power ability to set the market price HH Index (Sum of squares of Market Share). Factors that determine Market Structure.

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Shutdown rule - PowerPoint PPT Presentation

Basic Market Concepts