Class 13: Competitive Firms in Competitive Markets
Textbook reading: Kreps, Chapter 14, sections 14.1 through 14.4 and 14.6, plus the two stories in 14.5 (high-fructose corn syrup and shale oil, pages 326 to 329). Skip the toy model with sunk costs on pages 324 to 326 (it needs present values) and the subsection “Is Long-Run Supply Flat?” Where Kreps finds minimum average cost by setting a derivative to zero or equating two formulas, build the cost table and read it off, as in Class 12.