Oligopolistic Economies as Games of Limited Information: Existence of Equilibria
We first study in this chapter an economy whose agents are consumers as well as separable-fixed-cost firms such as those we have just considered. Each product, however, has just one possible producer. We consider, in particular, a state of the economy in which every product is produced, every firm’s profit is zero†, and all markets—including the markets for goods bought by consumers —are cleared. We shall prove that such a state exists when certain additional conditions, not considered in the preceding chapter, are imposed on production, on consumers’ demand, and on both together.
KeywordsIncome Undercut Monopoly
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