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class 12-2 post - Class 12 The Competitive Model Last Time...

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Class 12 The Competitive Model
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Last Time ompetitive Firms and horizontal Residual Demand ± Competitive Firms and horizontal Residual Demand ± Profit maximization ± Competitive Market Equilibrium
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Outline nter and Exit ± Enter and Exit ± Welfare Measures ± Competition maximizes Welfare pplication Ta es and Q otas ± Application: Taxes and Quotas
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Outline nter and Exit ± Enter and Exit ± Welfare Measures ± Competition maximizes Welfare pplication Ta es and Q otas ± Application: Taxes and Quotas
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Entry and Exit 5 S 1 S 2 S 3 S 4 S 3 5 15 10 MC AC 1 5
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Outline nter and Exit ± Enter and Exit ± Welfare Measures ± Competition maximizes Welfare pplication Ta es and Q otas ± Application: Taxes and Quotas
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Welfare S(p) P Welfare=Consumer + Producer Surplus * () ( ) ( ) ** 00 qq DS Wp q p d q p p q d q =− + ∫∫ p D(p) just one out of many plausible q q* ± W is just one out of many plausible measures ± Derived from willingness to pay and
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class 12-2 post - Class 12 The Competitive Model Last Time...

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