Structure Market environments Market demand for a competitive firm Short-run- supply decision Upward sloping MC curve Shut- down condition Long -run- supply decision Comparing long-run- and short--run decisions Producer's' surplus and profits
Structure Definition When to provide a public good Efficient provision Private provision: free-riding Variable quantities of public good -Efficient amount Free-riding problem How to provide public goods? Demand revelation
The Theory of Economics does not furnish a body of settled conclusions immediately applicable to policy. It is a method rather than a doctrine. an apparatus of the mind, a technique of thinking which helps its possessor to draw correct conclusions John Maynard Keynes
Information in Competitive Markets In purely competitive markets all agents are fully informed about traded commodities and other aspects of the market. What about markets for medical services, or insurance, or used cars?
