BCOR 1015 Study Guide - Midterm Guide: Price Discrimination, Perfect Competition, Free Trade
Document Summary
Competition: quantity competition bakeries choose then outputs, then prices adjust to clear market. Went from 10 bakeries to 1, but pricing sheets did not consider collusion among non- merged bakeries: price competition bakeries set prices and then produce quantity demanded. In the absence of frictions, we need only two bakeries to get perfect competition and a single price. Just price vance: in the absence of fraud, not only is any price agreed upon between a willing buyer and a willing seller the just price, that alone is what makes it the just price . Creative destruction/ disruptive innovation cox & alm: the same process of industrial mutation if i may use that biological term that incessantly revolutionizes the economic structure from within, incessantly destroying the old one, incessantly creating a new one. Mergers competition decrease: collusion goes back to the idea of just price (have to have two willing members of the agreement, otherwise it"s not just. )
