ANTOINE-AGUSTIN COURNOT I. ON METHOD: A. mathematics is a short-cut for expressing complex ideas 1.

math is used to find relations between magnitudes and between functions that cannot be necessarily expressed in algebraic symbols. B. used algebra, geometry and differential calculus II. THE LAW OF DEMAND: D = f(P) A. recognized the ceteris paribus assumption B. the demand curve is comprised of average annual prices this was supposedly based on actual observation C. the modern-day law of demand and demand curve is the same as Cournots EXCEPT for the use of annual prices in a one-year timeframe III.MICROECONOMIC MODELS A. MONOPOLY MODEL the case of the one seller of mineral water 1. The monopolist would not charge the highest price but will rather maximize receipts / total revenue 2. If the cost is zero, total revenue is maximized. If cost is positive, profit is maximized 3. What is the ideal price and ideal level of output for the monopolist in order to maximize total revenue or profit? B. DUOPOLY MODEL his most famous contribution as it was a groundwork for imperfect competition 1. ASSUMPTIONS: there is no conjectural interdependence : both firms are capable of being sole suppliers : there is zero cost 2. Duopoly price is lower than in a monopoly but higher than in competition IV. Envisioned economic theory as a box of tools rooted in empiricism

JULES DUPUIT I. Combined microeconomic tools with utility theory A. established foundations of welfare economics, public finance and public goods theory B. had training in calculus and in the use of functions C. combined the following in his studies: 1. relevant observed facts and derived statistics 2. subjects of economic interest and importance 3. math analysis D. Dupuit was directed towards real-world problems: measuring public utility which is the social welfare of public goods and services E. explored areas in marginal utility, demand, consumer surplus, monopoly models etc II. Marginal Utility and Demand A. Dupuit was the first to present a discussion on Marginal Utility and relate it to demand 1. MU diminished with increases in Q 2. last Q consumed determined utility and price B. Relating Demand and Utility 1. the basic principle of welfare economics III. On Monopoly and Price Discrimination A. in a monopolistic market, there is no room for increases in social/economic welfare because of the restriction in the entry of new firms since affordability is inherent in welfare economics, one price level does not depict a condition of affordability B. Price Discrimination (or Price Differentials) increases economic welfare