Competition and Markets — Part 2

Competition in the market and competition for the market are substitutes, as I mentioned in the previous post on the matter. When firms can freely enter (and exit) a market, it is called a free market. In a free market, firms compete with each other and the outcome of that competition is that prices are driven down to the cost of production. When we have a large number of identical firms producing a homogeneous good competing with each other we have a perfectly competitive market.
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Happy Winter Solstice 2012

The precise time of the Winter solstice this year was at 3:12 AM Pacific Standard Time (which was 4:42 PM Indian Standard Time) today, Dec 21st. I was up and awake busy tweeting. The first day of Winter finds the weather here cloudy but not wet. The past few days have been pretty and sunny. Anyway, just wanted to say Happy Winter Solstice. The Christian version of the Saturnalia is coming up in the next few days. I loves me a good carnival. Happy Christmas and happy holidays.

Narendrabhai Modi — What’s Next

Narendrabhai Modi won for the third consecutive time the Gujarat State assembly elections. Like in the earnings report of a corporation that analysts expect to be the outcome, the market already incorporates into its calculations the results and therefore it does not alter the stock prices, the outcome of the Gujarat elections don’t throw up any surprises. When there are no surprises, there’s little of interest. But what’s going to happen next is an interesting question because there will be surprises.
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On Competition and Markets

From a broad philosophical perspective, competition is encoded in the basic DNA of the universe. At every level of analysis, competing forces seek domination. At the largest inanimate scales, gravitational and electromagnetic forces constantly compete in stars. At the smallest scales, inside an atom, nuclear and electromagnetic force compete. In the biological world, living things compete all the time. It’s a constant battle between and among botanical and zoological species. Humans, as part of the animal world, are past masters of the game. We, like all other living organisms, are all descendants of ancestors who were successful in that competition at least long enough to have survived to reproduce.
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