Market Structure and Macro Economics

Paper Summary:

This paper studies economics by defining several important terms and providing graphs to explain them. It discusses the cost structures of a firm and defines the following terms: Short Run Costs, Long Run Costs, Market structures and more. It describes the causes of monopoly, oligopoly and perfect competition. It details fixed costs, variable costs and the principles of pricing. It concludes that pricing is dependent on consumer needs and the Demand curve in the market for that specific product.

From the Paper:

"In economics, the short run is defined as a time period in which a company's inputs are fixed. The short run costs of a firm are the cost functions that are prevailing in the production of a firm's goods in the short run. In the short run, the obligations of the firm per time period for all fixed inputs are called "total fixed costs." These includes the interest payments on the capital borrowed for the purpose of business, property taxes, leasing expenses etc. on the other hand, the total obligations for variable inputs over a period of time are the "total variable costs" of the firm. The variable inputs include those inputs that can be very easily changed and on a short notice. The variable costs of a firm usually includes the payments for the purchase of raw materials, labor costs etc. within a certain limit a firm can easily increase or decrease its output by varying the consumption of variable input. This gives rise to the Total Fixed Cost (TFC), Total Variable Cost (TVC) and Total Cost (TC) functions of the firm."

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