Perfect Competition vs Imperfect Competition

Firm behavior in competitive markets is probably one of the most fundamental subjects in economics. That is mainly due to the fact that most markets we encounter in reality are competitive, at least to a certain degree. Competition is characterized by a multitude of firms offering the same (or a […]

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Profit Maximization

In economics it is often assumed that companies try to maximize profit. That is, they try to maximize revenue while at the same time minimizing costs. In order to do that, firms need to look “at the margin”. That means, they have to keep an eye onĀ changesĀ in revenue (i.e. marginal […]

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