Econometrics And Econometricians December 01, 2021

Revenue curves under Different markets

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Broadly markets are of three types as follows: 1. Perfectly competitive market 2.Monopoly market 3.Monopolistic competitive market 1.Revenue curve under perfectly competitive market or Perfect competition: Under perfect competition, a firm is a price taker. It cannot influence /change the market price. AR and MR curve 2. Revenue Curve Under Monopoly: A monopolist is a price maker. He is the single seller of the product in the market. Under monopoly, however, if a firm desires to sell more , he has to reduce price of the product. Thus, there is  negative relationship  between price of the product na ddemand for the product in a monopoly market. Accordingly, a Firm’s AR curve (or the demand curve or the priice line) slopes downaward.  3. Revenue Curve Under Monopolistic Competition: In a Monopolistic Competitive market, producers sell “differentiated product” which means products whose close substitutes are easily available in the market. Under Monopolistic Compet...
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Difference between Microeconomics and Macroeconomics?

 Difference between Microeconomics and Macroeconomics

Sl. No.

Basis

Microeconomics

Macroeconomics

1

Degree of Aggregation

Studies the behavior of individual units of an economy such as consumer, household, producer, firm, market etc.

Studies the economy as a whole and behavior of economic aggregates such as national income, national output and employment, aggregate demand and aggregate supply etc.

2

Objective

The objective is to study the principles concerning the optimum utilization of resources.

The objective is to study problems, policies and principles related to full employment of resources.

3

Method of Study

The method used in Microeconomics is called “Partial Equilibrium Analysis.” In this, laws are based on the assumption of other things being constant. (Cetris Paribus)

The method of study in Macroeconomics is called “General Equilibrium analysis”. In this, laws are formulated recognizing the natural mutual inter-dependence among different economic variables such as total savings, total income, and total employment.

4

Instruments

In Microeconomics, the key instruments are demand and supply.

In macroeconomics, the key instruments are aggregate demand and aggregate supply.

5

Alternative Name

Microeconomics is also known as ‘Theory of Price’

Macroeconomics is also known as ‘Theory of Income’ and Theory of employment’.

 

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Revenue curves under Different markets

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