ECON 103 Lecture Notes - Lecture 20: Epinephrine Autoinjector, Externality
13 Dec 2018
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There will be sapling homework due tomorrow night. The industry analyses assignment is due tomorrow night as well. Things to remember on the industry analysis assignment. Ttaro is about quantities of real stuff, not prices. Prices are market signals, or incentives that cause buyers to respond. How much stuff we have, how it is made and how it is allocated is the equilibrium. Control a scarce resource or input (example: owning every mine for diamonds) Increasing returns to scale - as you produce more, it gets cheaper to produce. Technological superiority - nobody else can make the technology. Network externality - facebooks network is massive, why switch. Government barriers - patents, copyrights (example: epipen) In the case that demand is high, the market is competitive, but if the demand is low, a monopoly begins to form. A monopolist"s goal is to maximize profit.
