Chapter 9 Properties and Applications of the Competitive Model. No more good must be attempted than the public can bear. Thomas Jefferson. Chapter 9 Outline. Challenge: Licensing Taxis 9.1 Zero Profit for Competitive Firms in the Long Run 9.2 Producer Surplus
Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author.While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server.
No more good must be attempted than the public can bear.
Challenge: Licensing Taxis
9.1 Zero Profit for Competitive Firms in the Long Run
9.2 Producer Surplus
9.3 Competition Maximizes Welfare
9.4 Policies That Shift Supply Curves
9.5 Policies That Create a Wedge Between Supply and Demand Curves
9.6 Comparing Both Types of Policies: Trade
Producer surplus is closely related to profit.
Subtracting off fixed costs yields PS:
Producer surplus is useful for examining the effects of any shock that doesn’t affect a firm’s fixed costs.