AM07 Industry

This lecture is based on Chapter 6 of Hill & Myatt Anti-Textbook:

6 Market structure and efficiency – or why perfect competition

isn’t so perfect after all . . . . . . . . . . . . . . . . . . . . 118 - 149

Next lecture will be:

7 Externalities and the ubiquity of market failure . . . . . . . . 150

Sample Question for Final:

Textbooks make three claims about perfect competition

1. It provides fair and equitable outcomes, maximizing consumer surplus, and hence welfare for society

2. It leads to efficient outcomes, with no wasteful production

3. Monopoly and Oligopoly lead to inefficient outcomes, relative to perfect competition

Provide a very brief (one para) summary of the TEXTbook arguments for these positions.

Provide the COUNTER-ARGUMENT, the anti-text, for each of the three arguments. FOCUS on EMPIRICAL EVIDENCE -- that is, REAL WORLD observations which contradict the theory.