MicroL16 Essay Example | Topics and Well Written Essays - 1250 words

MicroL16 - Essay Example Still, it seems likely to be a reasonable assumption to help understand market behavior. Industries in which there are many producers and in which it is difficult to differentiate between goods from individual producers, baking potatoes for example, it is likely that assuming the market is perfectly competitive can yield a reasonably accurate understanding of the way the market works. For markets, however, in which there are a limited number of producers and in which the costs to enter the market are high, or where the government restricts entry, it does not seem a reasonable assumption. Electric power, for instance, is often only available within a community from a single commercial producer. While there may be some alternatives available to consumers, such as buying their own generators or banks of solar cells, for all but the most committed, the price of these alternatives is so high as to make them non-viable. Clearly, for a market like this, assuming competitive behavior is not reasonable. 2. Profits. In a competitive market in long term equilibrium, no firm can make an â€Å"economic profit†Ã¢â‚¬â€that is, have revenues in excess of costs, including â€Å"normal profit.† This is because economic profit will provide an incentive to other firms to enter the marketplace, shifting the industry supply curve and driving down the price until there is no longer an economic profit. In the short term, a firm may enjoy economic profits in the following three ways. The first way is when a firm might innovate in a way that drives down its costs of production. While other firms work to catch up, the innovative firm can enjoy economic profit. The second way is when a firm might innovate in a way that favorably differentiates its product from others, again allowing it to earn economic profit while other firms worked to match it. The third way is when an external event occurs, such as perhaps the introduction of a new complementary good, which might shift t he demand curve for the good in question, allowing the entire industry to experience short term economic profits until more firms were able to enter the market and increase supply. 3. Shutdown point for a firm. In the short run, a firm should keep operating as long as its average variable costs are less than the price of its product. This is because total revenue will cover the variable costs. Since, in the short run, fixed costs are not avoidable they should not be considered. In the long run, the firm cannot continue to operate at a loss. This means that a firm should shut down and leave the industry if, over the long run, average total costs will exceed price. 4. Long-Run Cost Curve, Economies of Scale and Firm Size. A firm is enjoying economies of scale when long-run (i.e., all inputs variable) average costs decrease as the number of units produced by the firm increases. As demand for the product increases, a firm in this position is likely to be able to meet the additional dema nd at a lower cost than a new firm entering the market, providing the existing firm with a competitive advantage. To the degree the firms in an industry experience economies of scale, there will likely be fewer firms (i.e., increased concentration) then there would in an industry where firms were experiencing decreased returns to scale Taken to the extreme, an existing firm with a continuously declining long-run cost curve would be in a

Desegregation of Public Schools in Boston Essay

Desegregation of Public Schools in Boston - Essay Example On the other hand, desegregation in Boston has brought about mixed responses. The opponents of desegregation argue that busing has resulted in an increased white-flight, considerable decline in white enrollment, increased racial imbalance, low levels of educational quality and paved way for more of racial tensions and violence in the Boston public schools (Buell & Brisbin 151-160). Many white-flight studies have pinpointed that school desegregation has resulted in white enrollment drop off and that court-ordered busing was partly instrumental in the â€Å"steep decline in white enrollments during the first two phases of Judge Garrity’s program† (Buell & Brisbin 152). On the other hand, one can never undermine the positive impacts of desegregation on the lives of many black and other minority Bostonians. This paper seeks to explore how desegregation of public Schools in the 1970s has affected the Bostonian society and in doing so the paper addresses key issues pointed ou t by the opponents of desegregation. ... A comparison of the statistics regarding the racial imbalance in Boston Public Schools according to District Court Guidelines in 1975 and 1980 reveals this. In 1975 schools with too many whites were 20 (35 in 1980); schools with too few whites were 47 (44 in 1980); schools with too many blacks were 43 (21 in 1980); schools with too few blacks were 24 (37 in 1980), schools with too many others were 41 (34 in 1980) and schools with too few others were 52 in comparison with 57 schools in 1980 (Buell & Brisbin 155). As evident from these statistics desegregation has considerably reduced racial isolation in the Boston schools. The opponents of desegregation also hold that the system has declined educational quality and has increased high school drop-out rates. For them, desegregation enhances racial achievement gaps as they believe that the pace of white instruction needs to be slowed so as to accommodate such black slow learners (Buell & Brisbin 161). It is also worthwhile to analyze the teacher perceptions of educational quality and to know whether the percentage of high school graduates pursuing higher education has undergone any positive changes. While the number of high school graduates has considerably increased most senior faculties are not so happy with the student performance since judicial intervention: â€Å"almost half of the senior faculty saw decline while only 13 percent reported improvement† (Buell & Brisbin 163). On the other hand, the magnet schools specially designed for desegregation came out with so many success stories of Boston busing and very often the media and press evaluated desegregation progress based on