Econ lecture 18

Econ lecture 18 - o youre cheating firm o exclusive right...

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Econ lecture 18 15:11 Outline of perfect competition Profits are the signal/magnet that draws them in Social signal – losses – society doesn’t want more uses of these resources.  They want fewer. Markets not competitively organized Cartels – imperfect competition S = Sum of (MC)
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Cartel Conspiracy
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Cartel profits – imperfect competition  cannot do it as a competitive market. o Shaded region Group of formerly competitive firms to act as if they were a monopoly. They charge a high price  If a person chooses not to join the industry – because he is a wealth  maximizer – and shows an opporuniy that other people don’t seee o FREE RIDER
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Cartel everytime you make a cartel – you benefit the people who are in it but a free rider makes more money what if joins and cheats 
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Unformatted text preview: o youre cheating firm o exclusive right to their respective writings giving invetnros exlusive rights Patents • legal mechanisms with wihc an invenor, risk capitalist, or corporation can protect the investment in time, money, effort and other resources expended in order to create a new contribution to technology to use “useful arts” in the terms by the united states constitution o gives ability to exlude others to use a property Monopoly Market (single price) • Monopoly as a policy problem • People tend to not be innovative • No competitor – becomes lazy and not innotative • If a firm is insulated from competition – will not be an innovator • Dead hand of monopoly. • Not being pushed to succeed • 15:11 15:11...
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Econ lecture 18 - o youre cheating firm o exclusive right...

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