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lecture 14 - Pareto-optimality – a brief look What is a...

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Search costs and transaction costs Implicit and explicit costs incurred while attempting to optimize investment Transaction cost – costs incurred at transaction time Profit maximization revisited Stock markets discipline firms to be profit maximizing LRAC – punt to TA & Gwartney
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Unformatted text preview: Pareto-optimality – a brief look What is a “Perfectly Competitive” Market? Each firm faces very elastic demand curve (i.e., a “price taker”) No entry or exit barriers No government price regulation Want to maximize profits? Then find out where MC=MR...
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