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PERFECT COMPETITION AND DEMAND: The demand curve for the output produced by a perfectly competitive firm is perfectly elastic at the going market price. The firm can sell all of the output that it wants at this price because it is a relatively small part of the market. As a price taker, the firm has no ability to charge a higher price and no reason to charge a lower one. The market price facing a perfectly competitive firm is also the firm's average revenue and, most importantly, its marginal revenue.
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Lesson 5: Demand | Unit 1: Buying Basics
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Page: 2 of 20
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More we need to consider about demand. First the demand price. Demand price is the maximum price that buyers would be willing and able to pay for a given quantity of a good. - The emphasis is on maximum. Buyers have an upper limit on the price that they would be willing and able to pay for a good.
- Buyers are willing and able to pay a lower price. In fact, they would be glad to get it for free.
- The maximum demand price is based on the fact of economic life that people prefer more to less.
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ASSUMPTION An initial condition or statement of a model or theory that sets the stage for an analysis by abstracting from the real world. Assumptions are important to economic analysis. Some assumptions are used to simplify a complex analysis into more easily manageable parts. Other assumptions are used as control conditions that are subsequently changed to evaluate the consequences.
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RED AGGRESSERINE
[What's This?]
Today, you are likely to spend a great deal of time searching for rummage sales hoping to buy either several magazines on fashion design or a package of 3 by 5 index cards, the ones without lines. Be on the lookout for infected paper cuts.
Your Complete Scope
This isn't me! What am I?
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Lombard Street is London's equivalent of New York's Wall Street.
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"We succeed in enterprises (that) demand the positive qualities we possess, but we excel in those (that) can also make use of our defects." -- Alexis de Tocqueville, Statesman
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IARA
Increasing Absolute Risk Aversion
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