Chapter6

Chapter6 - Perfect Competition Perfect Competition E ciency...

Info iconThis preview shows pages 1–3. Sign up to view the full content.

View Full Document Right Arrow Icon
Chapter 6.1 and 2.4 Evrim Dener SMU (SMU) 1 / 10 Perfect Competition Social surplus maximized Benchmark for welfare comparisons when competition is imperfect Rarely encountered in the real world (SMU) 2 / 10 Perfect Competition Assumptions Product homogeneity Atomicity Perfect information Free entry Equal Access (SMU) 3 / 10 Perfect Competition Firms and buyers are price takers Price taker: Cannot a±ect the market price If all ²rms in market are price takers, each ²rm faces a horizontal demand (SMU) 4 / 10
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Perfect Competition given by supply and demand conditions Q* is the sum of all individual production levels (q1+q2+. . . ) (SMU) 5 / 10 Perfect Competition (SMU) 6 / 10 π ( q ) = TR
Background image of page 2
Image of page 3
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 04/26/2008 for the course ECO 4382 taught by Professor Dener during the Spring '08 term at SMU.

Page1 / 3

Chapter6 - Perfect Competition Perfect Competition E ciency...

This preview shows document pages 1 - 3. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online