Econ 011706 Lec 4

Econ 011706 Lec 4 - shirts with profits if price is higher...

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Econ 011706 Lec 4 invisible hand-competitive equilibrium Is efficient o this means that competitive equilibrium maximizes total profit efficiency is about potential for mutual gain an outcome can be efficient but not fair Matchmaking demonstration shows competitive equilibrium when price is equal to demand profits=sum of heights of dark shirts with partners minus sum of heights of light
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Unformatted text preview: shirts with profits if price is higher than equilibrium not enough buyers and vice versa Linear Supply Curve p=cq+d price=[constant][quantity]+[constant] slope=c Linear Demand Curve p=a-bq slope=-b ie. Demand p=c0-.2q supply=.3q+2 20-.2q=.3q+2, solve...
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