🏠 Vault / School / H2 Economics / Theme2.2_2.3_LectureNotes.md
Theme 2.2 & 2.3 — Lecture Notes
<#>Theme 2.2 & 2.3 — Lecture Notes#>
📄 School/H2 Economics/Theme2.2_2.3_LectureNotes.pdf
<##>Coverage##>
- Theme 2.2: Firms and Decisions — objectives, cost/revenue, economies of scale, strategies (growth, diversification, shut-down, price competition, price discrimination, innovation, marketing, collusion), impact on efficiency and consumer welfare, cognitive biases
- Theme 2.3: Microeconomic Objectives and Policies — efficiency vs equity, deadweight loss, market failure (public goods, externalities, info failure, factor immobility, market dominance), policy toolkit, government failure
<##>Key Formulae##>
- Profit: $\pi = TR - TC$
- Profit max: $MR = MC$ (MC rising)
- Revenue max: $MR = 0$
- Allocative efficiency: $P = MC$
- Social optimum: $MSB = MSC$
- DWL when $MSB \neq MSC$
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