Diamond Water Paradox Adam Smith cid 127 Weight must have mass How much does a paragraph weigh Everything that has a price must have something in common what is this common stuff Value it could be either of the two Labor Utility Smith concludes a labor base approach Why does economic profit vanish under competitive markets Perfect info easy to get in and out Super Profit doing better than the market thinks you re entitled too Example Grocery Store you can move to any line will any line be consistently short no Perfect competition will equalize the return on scarce resources There is no super rate of return Cost Problem Labor and Quantity would be provided calculate fixed costs and variable costs TC AVC ATC MC READ CH 9 ECONOMIES AND DISECONOMIES OF SCALE cid 127 cid 127 cid 127 cid 127 cid 127
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