Unformatted text preview: differentiation 5. Does a reduction in product differentiation, i.e., standardization of the product, increase efficiency---[it certainly may as the theory of imperfect competition predicts; too many firms, etc.,] and is this simply a trade off between CHOICE AND EXPERIMANTATION vs. COST 6. In essence, one should ignore the formal definition of PC, and ask instead, what can be said about the process of competition doing so leads to what he calls a "margin of error" in predicting prices, products, etc . .i.e., there will be several prices, products no "equilibrium price" BUT EVEN SO, COMPETITION PREVAILS 7. The alternative to such anarchy is PLANNING---BY WHOM???---LIKELY THE GOVERNMENT, A FAR WORSE ALTERNATIVE 8. THUS>>>>> Don t worry about any failures to meet the classic definition of PC, and instead be concerned about the process of competition>>>>>>>>>LARGE SIZE PER SE NOT A PROBLEM!!! PARTICULARLY IN THE PRESENCE OF FREE TRADE...
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This note was uploaded on 09/18/2011 for the course ECON 80a taught by Professor Kaun,d during the Spring '08 term at UCSC.
- Spring '08