Lecture
This lecture explores the economic impact of innovations, focusing on the valuation of products like the Concorde and golden rice, the concept of consumer surplus, and the effects of innovation adoption on welfare. It delves into the principles of demand and supply curves, industry equilibrium, market power, and the dilemma of pricing innovations at market equilibrium. The instructor discusses the economic effects of adopting product and process innovations, the role of monopoly situations in innovation, and the challenges of choosing between pricing strategies that benefit consumers or innovators. Additionally, the lecture addresses the importance of welfare optimization in pricing decisions and the implications of state intervention in innovation markets.