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.
Video Lecture AM07: Industry - Covers Chap 6 of Hill & Myatt -- Market Structure and Efficiency. 1hr 33m
Graphical Display of Inequalities - Keynesian theory helped employment and increased labor share, while Chicagoan theory helped the wealthy