Table of contents

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0. Basic Principles of Economics1h 5m

Introduction to Economics
3m

People Are Rational
2m

People Respond to Incentives
1m

Scarcity and Choice
2m

Marginal Analysis
9m

Allocative Efficiency, Productive Efficiency, and Equality
7m

Positive and Normative Analysis
7m

Microeconomics vs. Macroeconomics
2m

Factors of Production
5m

Circular Flow Diagram
5m

Graphing Review
10m

Percentage and Decimal Review
4m

Fractions Review
2m

1. Reading and Understanding Graphs59m

Graphs of Two Variables
4m

Relationships between Variables
7m

Interpreting Graphs, Correlation, Causation, and Omitted Variables
6m

Slope of Linear Graphs
7m

Slope of a Curve at a Point
3m

Finding the Maximum and Minimum Points on Graphs
2m

Percentage and Decimal Review
5m

Fractions Review
12m

Areas of Shapes
8m

2. Introductory Economic Models1h 10m

Production Possibilities Frontier (PPF) - Introduction and Productive Efficiency
18m

PPF - Increasing Marginal Opportunity Costs and Allocative Efficiency
13m

PPF - Outward Shifts
8m

PPF - Comparative Advantage and Absolute Advantage
18m

PPF - Comparative Advantage and Trade
7m

PPF - The Price of the Trade
3m

3. The Market Forces of Supply and Demand2h 26m

Competitive Markets
10m

The Demand Curve
13m

Shifts in the Demand Curve
24m

Movement Along a Demand Curve
5m

The Supply Curve
9m

Shifts in the Supply Curve
22m

Movement Along a Supply Curve
3m

Market Equilibrium
8m

Using the Supply and Demand Curves to Find Equilibrium
3m

Effects of Surplus
3m

Effects of Shortage
2m

Supply and Demand: Quantitative Analysis
40m

4. Elasticity2h 26m

Percentage Change and Price Elasticity of Demand
19m

Elasticity and the Midpoint Method
20m

Price Elasticity of Demand on a Graph
11m

Determinants of Price Elasticity of Demand
6m

Total Revenue Test
13m

Total Revenue Along a Linear Demand Curve
14m

Income Elasticity of Demand
23m

Cross-Price Elasticity of Demand
11m

Price Elasticity of Supply
12m

Price Elasticity of Supply on a Graph
3m

Elasticity Summary
9m

5. Consumer and Producer Surplus; Price Ceilings and Floors3h 45m

Consumer Surplus and Willingness to Pay
38m

Producer Surplus and Willingness to Sell
26m

Economic Surplus and Efficiency
18m

Quantitative Analysis of Consumer and Producer Surplus at Equilibrium
28m

Price Ceilings, Price Floors, and Black Markets
38m

Quantitative Analysis of Price Ceilings and Price Floors: Finding Points
20m

Quantitative Analysis of Price Ceilings and Price Floors: Finding Areas
54m

6. Introduction to Taxes and Subsidies1h 46m

Introducing Taxes and Tax Incidence
19m

Effects of Taxes on a Market
12m

Elasticity and Taxes
14m

Subsidies
16m

The Laffer Curve
9m

Quantitative Analysis of Taxes
13m

Tax Efficiency
9m

Tax Equity
11m

7. Externalities1h 12m

Externalities: Social Benefits and Social Costs
28m

Public Solutions to Externalities
26m

Private Solutions to Externalities: The Coase Theorem
17m

8. The Types of Goods1h 13m

Four Types of Goods and Two Characteristics
28m

The Free Rider Problem and the Tragedy of the Commons
22m

Public Goods: Demand Curve and Optimal Quantity
23m

9. International Trade1h 16m

Exporting and Importing
16m

Sources of Comparative Advantage
6m

Tariffs on Imports
21m

Import Quotas and VERs
23m

Arguments Against International Trade
7m

10. The Costs of Production2h 35m

Revenue, Cost, and Profit
30m

The Production Function and Diminishing Returns
12m

Marginal Cost
27m

The Relationship Between Average Cost and Marginal Cost
23m

Graphing Costs
17m

Average Total Cost: Short Run and Long Run
19m

Isoquant Lines
9m

Isocost Lines
7m

Cost-Minimizing Combination of Labor and Capital
6m

11. Perfect Competition2h 23m

Introduction to the Four Market Models
2m

Characteristics of Perfect Competition
6m

Revenue in Perfect Competition
14m

Perfect Competition Profit on the Graph
20m

Short Run Shutdown Decision
33m

Long Run Entry and Exit Decision
18m

Individual Supply Curve in the Short Run and Long Run
6m

Market Supply Curve in the Short Run and Long Run
9m

Long Run Equilibrium
12m

Perfect Competition and Efficiency
15m

Four Market Model Summary: Perfect Competition
5m

12. Monopoly2h 13m

Characteristics of Monopoly
21m

Monopoly Revenue
12m

Monopoly Profit on the Graph
16m

Monopoly Efficiency and Deadweight Loss
20m

Price Discrimination
22m

Antitrust Laws and Government Regulation of Monopolies
11m

Mergers and the Herfindahl-Hirschman Index (HHI)
17m

Four Firm Concentration Ratio
6m

Four Market Model Summary: Monopoly
4m

13. Monopolistic Competition1h 9m

Characteristics of Monopolistic Competition
10m

Revenue in Monopolistic Competition
14m

Monopolistic Competition Profit on the Graph
13m

Monopolistic Competition in the Long Run
14m

Efficiency in Monopolistic Competition
8m

Advertising
4m

Four Market Model Summary: Monopolistic Competition
3m

14. Oligopoly1h 26m

Characteristics of Oligopoly
16m

One-Time Games and the Prisoner's Dilemma
30m

Game Theory and Oligopoly Profit
16m

Repeated Games
5m

Kinked-Demand Theory
13m

Four Market Model Summary: Oligopoly
3m

15. Markets for the Factors of Production1h 26m

The Production Function and Marginal Revenue Product
16m

Demand for Labor in Perfect Competition
7m

Shifts in Labor Demand
13m

Supply of Labor in Perfect Competition
7m

Shifts in Labor Supply
5m

Differences in Wages
6m

Other Factors of Production: Land and Capital
5m

Unions
6m

Monopsony
11m

Bilateral Monopoly
5m

16. Income Inequality and Poverty35m

Income Inequality in the USA and Worldwide
1m

Poverty
5m

Polices to Reduce Poverty
6m

Lorenz Curve and Gini Coefficient
16m

Income Equality and Efficiency
6m

17. Asymmetric Information, Voting, and Public Choice39m

Asymmetric Information: Adverse Selection and Moral Hazard
11m

Solutions to Informational Problems
11m

Median Voter Theorem
9m

Condorcet Voting Paradox
7m

18. Consumer Choice and Behavioral Economics1h 16m

Budget Constraint
27m

Indifference Curves
25m

Indifference Curves for Perfect Substitutes and Perfect Complements
4m

Consumer Optimum Consumption: Budget Constraint and Indifference Curves
7m

Consumer Optimum Consumption: Marginal Utility per Dollar Spent
13m

3. The Market Forces of Supply and Demand

Competitive Markets

Microeconomics

3. The Market Forces of Supply and Demand

Competitive Markets

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Multiple Choice

In a purely competitive industry, the representative firm:

is a price taker and cannot influence the market price

faces a downward-sloping demand curve for its product

can set its own price above the market equilibrium

earns long-run economic profits due to barriers to entry

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Verified step by step guidance

Understand the characteristics of a purely competitive industry: many firms, identical products, free entry and exit, and perfect information.

Recall that in perfect competition, each firm is a price taker, meaning it accepts the market price as given and cannot influence it.

Recognize that the demand curve faced by an individual firm in perfect competition is perfectly elastic (horizontal) at the market price, not downward-sloping.

Note that firms cannot set prices above the market equilibrium because buyers would switch to other sellers offering the market price.

Understand that in the long run, due to free entry and exit, firms earn zero economic profits, as any short-run profits attract new entrants, driving profits down.