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In what way is competition the opposite of monopoly? In what way is PC same as monopoly model? Why does McNulty say the traditional distinction between C and M was in a fundamental sense inappropriate to begin with?
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Differences: number of sellers, in M you restrict output to raise $, but don't in C, M infinite BTE and C nonesimilarities: PM and no rivalrythe models are too similar and to say they're on opposite sides of the spectrum is wrong
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Why would McNulty argue that PC is a poor basis for antitrust laws intended to maintain C? Why is it of little help in evaluating the competitiveness of advertising, product variation, or price cutting? Is price cutting monopolistic or competitive?
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Poor basis for antitrust because there is no rivalry. PC cant help with advertising, etc because its not included in the model, terms of trade taker and everything is optimal. price cutting isn't in competitive model so it must be M
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In what ways does PC mean an absence of competition just as complete as in the monopoly model? Why does McN make this, rather than the PC model's abstraction or the unreality of its assumptions, the most important limitation in the usefulness of the PC model for economic policy?
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Because there's no rivalry its the same as M because in M there's only one seller and therefore no competition. the issue is that models assume away rivalry and we use the model to explain behavior, ignoring a lot of variables so its useless.
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If you mixed PC and monopoly to get monopolistic C, but both PC and M are PM models, while monopolistic C applies to differentiated products, might that cause the monopolistic C model to have an inappropriate definition of eq?
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Monopolistic C assumes you're a monopolist for a certain brand of product with a more elastic demand, competitive part is free entry but still assumes OE; however Mono C applies to differentiated products that can't be sold on OE because can't be standardized i.e. restaurants and gas stations
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How is competition like gravity? How is it like a perfect vacuum?
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Gravity-force to bring you to equilibriumvacuum-assumed state, and you're supposed to get an answer from that
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Does Adam Smith's often criticized statement that the price of monopoly is upon every occasion the highest which can be got make sense if we view monopolies as able to PD? Would the quote be any different for C firms if they could PD?
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Highest price sold would be fore one unit. model assumes everyone is at the market at the same time but if you deal with each person one by one you'd PD and try and get the highest price. M and C is the same, if you know who a person is you'll PD, only thing that would constrain you is goodwill.
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Explain why, as a result of thinking of C as only taking place in the market, "C was never related in any systematic way to the technique of production within, or to the organizational form of, the business firm itself. The concept has thus been divorced since the earliest days of scientific economic analysis, from a major area or facet of economic activity." Is what happens within firms competitive activity? Could firms create superior internal competitive markets for factors of production?
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C doesn't just happen in the market it happens within firms. if just between firms, then when number of firms decreases C decreases. superior internal markets can mean lower prices, i.e. know how to use people more efficiently. promoting people in the firm, economies of scale, being under one boss (idea and loan)
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If "the operations of the business firm, except for the exchange relationships... have not traditionally come within the meaning of C," what sorts of internal C behavior would the traditional approach necessarily miss?
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Structure promotions better, i.e. tournament theory, no invented here syndrome
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How does Schumpeter's concept of C differ from AS? How does it relate to economics' use of ceteris paribus assumptions? If other things, like tech change, what does that do to the validity of the reasoning behind LR cost curves?
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AS version of C is that you think of an existing product and you're competing in that existing market. S is saying the more important competition is from people that create entirely new tech. model assumes that you know everything in the beginning and all relevant info with ceteris paribus. LR cost curves assume SR cost curves stay the same, however thats not the case i.e. if you're bad at monitoring cost curves will increase.
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Why was the neoclassical development of the concept of PC as itself a market structure... a sharp discontinuity in the development of social thought? How are the classical and neoclassical views of C incompatible in a fundamental sense?
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Rivalry isn't about structure its about behavior, its not about number of firms in the market its about who's in the market. ignores C within firms, where efficiency is passed on to customers ex, efficiency wages.
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In what sense is a PC firm a monopolist with a special environment?
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PC is basically like a M because assumes PM--in that way they're basically the same because there is no rivalry and no competition. similar to M because no room for superior improvement. special environment because there are more firms
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How does McN (Smith) see cost as a function of monopoly? Could it be instead that firms grow, sometimes become dominant, because they do a better management job, reflected in lower costs and prices and earn higher profits at the same time?
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To be a M you have to have lower costs than your rivals and pass some of those gains onto your customers in order to dominate the market. if they do a better mgmt job, this meals lower profits. graph with downward price power.
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Is there any search for lower cost production methods in either the PC or M models? Is there any prior reason to believe that such search would be less for larger firms?
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No search for lower cost production methods in either model. in C, everyone has the same costs and in M you're the only player so there's no incentive to make production better. may be lower cost for large firms but that doesn't necessarily mean it's always lower for big firms. turbo charged vs. scrap it tech, economies of scale, etc.
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On what basis could an observer know that all firms are equally inefficient in internal administration? If how to do things right was known, who would continue to do it wrong? By what standard do we know they're all inefficient? Could it be that our standard of efficiency might be inappropriate?
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If all firms did things wrong their costs would be higher. model assumes away the problem therefore when you fix it you only see the cost and not the benefit. example, agency costs. standard of efficiency is unattainable so it proves as a poor indicator.
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If economic growth in demand was expected, how would it change whether a firm would choose the plant scale which minimized for a given technology, the cost of producing a unique eq output?
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Std model assumes you can product Q forever, which lowers the value of a flexible plant. on PM you could sell exact A you wanted immediately but in reality you have to grow to that point and there will be excess capacity, in terms of PV very costly. if you thought demand would grow, it'd be better to have a more flexible plant, etc.
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