ECON 20 Lecture Notes - Lecture 9: Ceteris Paribus, Joseph Schumpeter, Demand Curve
19 May 2020
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The model assumes you"ll be able to produce on that scale forever which doesn"t work because there"s always new technology risk. Once you admit that there might be new tech risk, you wouldn"t pick the biggest plant. Managing putting money in to manage the workers. Assumes already in eq, no rivalry possible so no process of comp. visible. Process in diseq world where prices are something to control to eq world where there"s no control over prices no ability to change anything. Idea that we use comp to mean different things, except none of it is consistent it could mean this, it could mean not this. Taking the standard comp model, start with demand curve to derive mr and =mc, solve for q then magically sells itself. Pc take demand curve, derive mr (if horizontal demand curve, mr is the same as demand), =mc: only difference is that demand is downward sloping vs straight basically the.
