Every year there are conventions where teachers from around the county discuss the syllabus and exams for all the subjects. The economics one was a few weeks ago and they said that too many people were getting full marks with SPECS so now they want SPECS but also to be able to link it to the key characteristics of that market. I'm just asking if anyone was any notes to help.
previously all you needed to explain the equilibrium curves for each market was SPECS:
S is snp earned and why (AR equal or greater than AC)
P price at p1 quantity produced at q1
E equilibrium occurs at E where MC = MR
C cost of production (is at at lowest point of AC)
S scarce resources are they wasted (production at AC or not)
No that's wrong - if they ask you to explain long-run equilibrium and you give SPECS (in the right order) you will get full marks.
However, they may ask you to link SPECS to the assumptions you described earlier in the question. In that case, link each aspect of SPECS that it applies to - just one line is enough.
E.g Monopoly : SNP's are earned as AR is greater than AC - this is due to the barriers to entry which allow the firm to set any price they choose (as there is no competition) etc.
No its not the first year - they've asked the question in the past but I can't remember what year.
REMEMBER : You only link if IT STATES IT IN THE QUESTION, otherwise SPECS is grand.
Did your teacher tell you about this convention where they said this?
Answer like this...
Equilibrium: At point E where mc=mr and mc is rising.
Price: Produces @ P1 etc.
Output: Produces @ Q1 etc.
Profits: If the firm is earning SNP's or not.
Efficiency: If the firm is producing at the lowest point of AC or not.
You can use this with any market form.
Hope this helps :)