Monday, April 18, 2011

A First Lesson in Producer Theory

Remember when you were a kid and starting your first lemonade stand? You were sure to make loads of money in this enterprise. What was the first decision you made?

Did you deliberate long and hard about the price you would set? Did you take the market price as given and (from there) decide on the optimal quantity? Or, better yet, did you try to locate at the optimal spot in the neighborhood?

For some related thoughts, consider these two videos. I haven't yet done one on where to locate.

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