economic theory
Pure Metal
15-02-2008, 19:55
this is a short one... can anybody tell me which economic theory suggests any two agents operating in the same market will end up producing homogenious goods at the same price in the long run?
i've been trying to remember this one for weeks and i just can't put my finger on it :mad:
I'm not quite sure what you're looking for, but Wikipedia (http://en.wikipedia.org/wiki/Economics) might help point you in the right direction.
Pure Metal
15-02-2008, 20:16
eh, i looked at wikipedia but i didn't know where to begin. scanned though microeconomics and a few other bits but couldn't find anything. we learned about it in A level economics, not at uni, so maybe it isn't widely accepted or something :confused:
Call to power
15-02-2008, 20:17
single life? gay porn? Ripley from Aliens?
yeah its the funniest thing I could make :p
Unlucky_and_unbiddable
15-02-2008, 20:41
Cournot model? I dunno, I've never taken an economics class but its sounds similar from what I remember of it.
HC Eredivisie
15-02-2008, 20:52
Communism.
Sorry.
Neu Leonstein
15-02-2008, 23:14
Cournot model?
Yeah, that direction would be my best guess too. IIRC the Cournot model is about an oligopoly where agents try to figure out how much to produce my creating simultaneous equations with which they can solve how much the other guy will make (since the assumption is that the two have similar or equal cost structures) and hence how much they will themselves.
Other than that, we might need a bit more information. Generally in most market theories the homogeneity of the goods is sort of assumed. And in the exception where there's differentiated competition, the suggestion from the theory is usually to make sure your good is as unique as possible to get a steeper demand curve and capture more of the surplus.
this is a short one... can anybody tell me which economic theory suggests any two agents operating in the same market will end up producing homogenious goods at the same price in the long run?
i've been trying to remember this one for weeks and i just can't put my finger on it :mad:
http://en.wikipedia.org/wiki/Law_of_one_price
The "Law of One Price" - assuming perfect market information and homogeneous goods.
Cosmopoles
16-02-2008, 01:39
I've only completed two years of my economics degree, but what you describe does indeed sound like a Cournot oligopoly, where firms compete on quantity rather than price, the opposite being a Bertrand oligopoly, where two firms compete on price rather than quantity. Cournot oligopolies existed in early 1970s corn syrup production and copper mining during the late 1990s, if you'd like a couple of real world examples.