Define importance of patents to the economic system

Reference no: EM132201129

Question: 1) Your professor discussed the benefits of the perfectly competitive market. Among these was profit maximization, productive and consumptive efficiency. Still more benefits of the PC model pertain to individual choice and liberty. What historical paradox of social structure does the perfectly competitive equilibrium resolve?

2) Provide one example of a transaction cost.

3) In the long run equilibrium of the perfectly competitive market all firms produce at the minimum of their average cost curve. What is economic profit at this point?

4) Describe in your own words the importance of patents to the economic system.

5) Discuss the notion that greed is good in the context of a perfectly competitive market and in that of a monopoly. How must greed manifest itself in a perfectly competitive market in long run equilibrium.

6) Using the following equations set up the Cournot profit function for firm 1. And solve for the Nash equilibrium quantity of firm 1.

Demand P (q) = 100-2Q

Total Costs C(q) = 20q

Reference no: EM132201129

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