On Modelling Markets
We analyze critically the usual analysis of free (that is, unreguled by a central authority) market behavior of prices and traded amounts. We find that quite usually either the offer function or the demand function cannot be defined meaningfully, and other models must be set-up. We show also that profit maximization is most times uncorrectly used and wrongly calculated. We show that the absence of regulation (perfect price and production flexibility) and perfect competence does not necesarily lead to equilibrium between offer and demmand.
|Date of creation:||21 Jul 2002|
|Note:||Type of Document - postscript; prepared on PC; to print on Postscript; pages: 9; figures: none. We point out a missuse of benefit maximization and offer-demmand interplay|
|Contact details of provider:|| Web page: http://econwpa.repec.org|
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