Friday, September 25, 2015

The theory of perfect competition (contestable markets) is not all theory afterall

Doesn't this come close to textbook discussions on perfect competition?  Also, relate this to the long-term decision making problem of a firm when it does not have perfect foresight.  Do you think Kwid will be able to recover its fixed costs of Rs.3000 crore on a new plant with its aggressive pricing strategy?

http://www.thehindubusinessline.com/companies/renault-launches-small-car-kwid-at-rs-26-lakh/article7684827.ece


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