How Markets are Supposed to Work

The following sections are included:

• Introduction

• The Competitive Market

• Consumer Behaviour and Demand

  • The Individual Demand Curve

  • The Concept of Elasticity

  • Market (Industry) Demand

• Producer Behaviour and Supply

• Market Equilibrium in the Competitive Market

• Consumer and Producer Surplus

• Applications of the Competitive Model

  • The Socially Optimal Level of Forestry

  • The Effect of Pollution Abatement Costs on Employment

• Summary

• Key Terms and Concepts

• Review Questions

• Exercises

• Further Reading