11-Perfect Competition (I)

11-Perfect Competition (I) - Agenda Course Overview Profit...

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1 Agenda • Course Overview • Profit Maximization • Perfectly Competitive Markets • What To Take Away Microeconomics The Structure of the Course Consumers and Producers Market Interaction Today’s lecture Uncertainty Perfect competition Monopoly and Pricing strategies Competitive Strategy Auctions Information in Markets and Agency Game Theory Introduction to Markets Consumer Theory and Demand Technology and Production
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2 Agenda • Course Overview • Profit Maximization • Perfectly Competitive Markets • What To Take Away Profit Maximization We will work under the assumption that a firm behaves as an entity that seeks to maximize profits. This is a good benchmark to understand firm decision making and it is reasonably accurate. Nevertheless, Nevertheless, Decisions within organizations are made by managers that may seek other goals (revenue maximization, status within the community, private benefits through the use of company resources). Therefore a firm where decisions are made by self-interested managers and owners cannot effectively monitor managers may deviate from achieving maximum profit (we will see this in Lecture 28) Ultimately a firm that is not profitable will not be able to survive in a competitive market. This is one reason to believe that ultimately businesss decisions will largely take into account profit considerations.
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3 Profit Maximization How much would a profit-maximizing firm produce? We can conceptually study profit maximization behavior
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This note was uploaded on 11/30/2010 for the course ECON 251 taught by Professor Tontz during the Fall '10 term at USC.

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11-Perfect Competition (I) - Agenda Course Overview Profit...

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