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In this course, we will begin covering the theory of the firm. Economists call this "The Economics of the Lemonade Stand." And that title makes perfect sense, since the concepts we cover can be used by anyone, from someone owning a lemonade stand, to a car manufacturing company, to a hair salon, to a burrito stand, etc. We will continue our discussion of the firm by focusing on those firms working in a perfectly competitive (or competitive) environment. Also, why is it that when you fly, the person sitting next to you in the plane probably paid a different price for the ticket than what you paid for it? And why does Starbucks charge so much for its coffee even though you can buy coffee at Dunkin’ Donuts for almost half of that price? We will finish our discussion of the firm by focusing on cases that should be more familiar to you than the perfect competition examples we have been using.
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