Econ lecture 18

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

Info iconThis preview shows pages 1–8. Sign up to view the full content.

View Full Document Right Arrow Icon
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)
Background image of page 1

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

View Full DocumentRight Arrow Icon
Cartel Conspiracy
Background image of page 2
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
Background image of page 3

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

View Full DocumentRight Arrow Icon
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 
Background image of page 4
Background image of page 5

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

View Full DocumentRight Arrow Icon
Background image of page 6
Background image of page 7

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

View Full DocumentRight Arrow Icon
Background image of page 8
This is the end of the preview. Sign up to access the rest of the document.

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...
View Full Document

Page1 / 8

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

This preview shows document pages 1 - 8. Sign up to view the full document.

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