Steve Keen: “Mythonomics”
The Great Simplification with Nate Hagens
00:00
How to Maximize Profits in a Competitive Industry
Firms don't maximus profit by aquiting marginal cost and marginal revenue, which is the bolitany they get towardnfirs in mikor economics. Because if they do, the price will be below average cost. The'll lose money. So what firms actually do, rather than choosing a profit maximizing output level, they try to flog as many units as they can. In a competitive industry, the more units you sell, the more profit youl make. Your average cost of falling as your output rises. And this is an explanation for large firms evolving and for the competitive behaviour of firms,. where they always try to sell as many unitsas they can.
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