Optimal Competitive Markets

This lecture delves into the concept of competitive markets, explaining the equilibrium between supply and demand. It explores how market equilibrium leads to optimal outcomes, the role of prices in ensuring efficiency, and the challenges posed by non-competitive markets, such as monopolies and cartels. The instructor illustrates how discrepancies between private and social willingness to pay can impact market outcomes, and discusses the need for government intervention to align markets with social welfare. The lecture also touches on external costs, anti-competitive behavior, and the importance of the market model in explaining real-world economic phenomena.