The final topic of the HL Theory of the Firm section is Price discrimination. This is where the producer charges different consumers (or different groups of consumers) different prices for the same product (but not for reasons of cost differences). There are 3 types (or degrees) of price discrimination, the imaginatively titled 1st, 2nd and 3rd …
Game theory is an area of Economics that is increasingly used to explain many situations where strategic thinking and action is involved. It is “the formal study of decision-making where several players must make choices that potentially affect the interests of the other players” (von Stengel & Turocy). It is an area study which has led to …
During our studies of market structures we have come across oligopolies. We have found that in this form of structure there can be both collusive and non-collusive markets. It is important to remember that this means that we also have more than one model to help us explain and analyse this form of structure. We …
In the higher level course, it is important to understand that barriers to entry are an important source of monopoly power and that they can occur for a number of reasons. Some ways they can occur are through anti-competitve behaviour (mis-using your market dominance), cartels and collusion, and through patents. In the news they are …
In Economics there are many terms which you need to learn, understand and be able to define. In our classroom there are many of these terms in posters on the wall. Below are the posters in pdf form at A4 size. Introductory Economics Microeconomics Macroeconomics International trade Theory of the firm (Higher level only) Clicking …
The link is to an interview which includes one of the founders of Ben & Jerry’s ice cream. In the higher level course, when studying ‘theory of the firm’ we generally tend to assume that the objective of the firm is to maximise profits (MC=MR). But the syllabus also requires you to think about and …