Economics @ ITT

The Demand-Side Temptation

Posted in economics, Keynesian Economics, macroeconomics by ittecon on January 25, 2011

Nick Rowe makes a good point: most of the time, in market economies, sellers feel constrained while buyers don’t. I’m somewhat surprised that he doesn’t mention why: it’s because perfect competition is actually rare, because oligopoly or monopolistic competition — in which prices exceed marginal cost — is actually the norm.

via The Demand-Side Temptation – NYTimes.com.

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