te property; partnerships; limited liability companies (corporations) (open
and closed joint stock companies). The specificity of the Russian legislation on
the issue of the enterprises' organizational forms.
The goal of the firm in the contemporary market economy. Incomes and costs as the chief
parameters that determine the firms' decision-making on the output of goods. Main
financial documents - profit and loss account and the balance - and their significance. The
concept of the cash flow and the stock.
The difference of economic costs from the cash expenditures flow (interpretation of credit
debts, depreciation, stock changes). The difference between economic costs and bookkeeping costs and the concept of opportunity costs.
The selection of a production technology and the costs curve. The concept of the factor
intensity of production. The prices influence upon the choice of a technology and the
TOPIC 7 PRODUCTION. COSTS, INCOME AND OUTPUT
Total, average and marginal costs. The concept of the total and marginal income. the
curve shape of the total and marginal income. Marginal costs equalization
with the marginal income as a general principle of the output scale optimization.
The need for a separate consideration of the problem of costs in short- and long-terms
(partial and full adaptation of production factors to the changing market conditions).
Thrift and losses caused by the production scale in the long-term prospect and the Ushape of the long-term average costs curve. The presence of the fixed and variable factors
of production and, respectively, of the fixed and variable short-term costs. The connection
of the U-shape of the short-term average costs curve with the diminishing efficiency of
the variable factor of production.
The problems of profit maximization and loss minimization and the there associated
specificity of decision-making on the short-term and long-term optimal output.
TOPIC 8 MARKET STRUCTURE. PERFECT COMPETITION AND PURE
The concept of a market structure. The general definition of the perfect competition and a
pure monopoly market (monopsony).
Conditions for the existence a of perfect competition market (a large number of
producers, each having a negligible share in the total output of the industry; the output of
standard items by all firms within the industry; availability of full information to
consumers about the quality of products manufactured by different firms; a free
"entrance" into the market and a free "exit" therefrom). Short-term and long-term
marginal costs and the short-term and long-term supply curves of the firm and the
industry. Marginal income equal to the price and the modification of conditions for an
optimal output. The concept of a "marginal firm" and the conditions for the existence of a
horizontal long-term supply curve for the industry. The effects for the output of the
industry of the (a) changes in the overall level of costs and (b) demand for the products.
The absence of real and tentative domestic and foreign competitors as a condition for a
pure monopoly. Profit maximization algorithm by a pure monopoly. The reasons for the
absence of the supply curve in a pure monopoly. The concept of the measure of monopoly
power and of monopoly super-profit. Comparison of a competitive industry with a
monopolized one and composed of many enterprises. The social price of a monopoly
composed of many enterprises. Natural monopolies and the problems of their activity
regulation. Discrimination monopoly in the conditions of a likelihood for market
segmentation. The monopoly and technological progress.
TOPIC 9 MARKET STRUCTURE. OLIGOPOLY AND MONOPOLY
The concept of a non-perfectly competitive firm. Two types of non-perfect competition:
oligopoly and a sector of monopoly competition.
The conditions for the existence of a monopoly competition sector (a lot of small firms,
free "entry" and "exit", diminishing demand curve for the products of each firm. The
causes that generate the non-horizontal character of the demand curve for the output of
these firms. The mechanism of a "tangency equilibrium" under the conditions
of monopoly competition. Particular features of the firm's monopoly power manifestation
under these conditions.
oligopoly: a conflict between the desire for a collusion and competition. A kinked
demand curve in an oligopoly. The Cournot equilibrium. The significance of the games
theory for describing the behavior of oligopolies. Natural and engineered barriers to the