Reading Notes September 21st

Reading Notes September 21st - Carter Whittington Jordan...

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Carter Whittington Jordan Radke Soci 415 21 September 2011 Reading Notes 9/21 In Chapter 6 McMillan focuses on why competition is necessary for a properly functioning market through the lens of the “best bidder.” He starts off giving the example of the fish market in order to show how competition is advantageous to the buyer because it reduces prices to the second lowest competitor. He also gives several other examples to show how the more competitors there are, the more the buyer benefits. Next, he gives the example of an art auction to make the point that bidding usually sets a proper value for a work of art whereas if you only allowed each person one bid (the best bid method), the price of the art would be significantly undervalued because no one wants to pay too much. He also shows this through examples of the oil industry and literary auctions. The overall point he wants to make is this; competition helps set prices right, reduces transaction costs, and forces sellers to conduct business as efficiently as possible. All of which is critical for a healthy market.
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Reading Notes September 21st - Carter Whittington Jordan...

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