ECON 20 Lecture Notes - Lecture 6: Perfect Competition, Price Discrimination, Comparative Advantage
19 May 2020
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Always going to understand the world as some perfect model: ex. No because you can always sell whatever you want. Take away the certainty that you can sell however much you want. Now it makes sense to have an inventory because you don"t know how much you can sell. No rivalry, pc, so little help to advertising bc in perfect market, everything"s. If you differentiate, that means you"re bearing a cost, so there must be a benefit could be interpreted as competition (ex. Because you"re forcing all the others to match your costs =>evil monopoly abuse: price cutting price is given so you can"t even cut the price. In competitive, if someone"s cutting price, and you"re not, than you"re wrong. If you are cutting price could be trying to drive out rivals, later becoming a monopoly. No rivalry in either one if trying to evaluate rivalry, that"s the crucial flaw.
