01:220:389 Lecture Notes - Lecture 1: Bell System, Reservation Price, Complementary Good
4 Oct 2018
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Document Summary
Long run- profit max occurs when: atc=mr=mc: monopolistic competition, many firms, some product differentiation, some non price competition, extensive advertising used to differentiate product. Impedes competition: psychological manipulation, fools consumers into thinking products are different, consumers become less price sensitive, pros, provides information to consumers. Game theory: a framework to explore the actions and reactions of interdependent decision-makers. 1770 to 1820: railroads, steamships, shift from wood to iron and steel, andrew carnegie became richest man he has more money than buffet and. Internal combustion engine: electricity, air conditioning, highway system, commercial air transportation, television, ri#2 revolutionized, revolutionized every span of human wants and needs, food, clothing, housing, transportation, entertainment, communication, health, working conditions. Information and communication technology: ri #3 revolutionized, entertainment, communication. Information: the jungle- upton sinclair, the chain- ted genoways, the meat racket christopher leonard, origins of antitrust policy. Increase likelihood of coordination behavior in the industry. Increase likelihood of unilateral price increase without detached collusion.
