In a competitive market, equilibrium prices and quantities characterize the so called Pareto-efficient matching which represents the best outcome for both buyers and sellers under the relevant constraints they face. It is the best outcome in the sense of maximizing the welfare of both the consumer and the producer under given conditions.
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The market equilibrium wage and the quantity is determined by the labor supply and demand.
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Nash Equilibrium represents a situation among the interacting firms that each firm choose their best strategy given the strategies that all the other firms have already choosen.
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Hayda...
Wilson (1975) suggests that male homosexuality may have evolved through kin selection:
The homosexual members of primitive societies may have functioned as helpers, either while hunting in company with other men or in more domestic occupations at the dwelling sites.... They could have operated with special efficiency in assisting close relatives. Genes favoring homosexuality could then be sustained at a high equilibrium level by kin selection alone. (p. 555)
So, there we have it: the "homosexual helpers at the nest" hypothesis, or as Kitcher (1985, p. 251) says, "the helpful homosexual. Every home should have one."
What evidence did Wilson have to make this claim?
Kitcher, P. 1985. Vaulting Ambition: Sociobiology and the Questfor Human Nature. Cambridge, MA: MIT Press.
Wilson, E. O. 1975a. Sociobiology: The New Synthesis. Cambridge, MA: Harvard University Press.
Perfect competition” is considered both the ideal and the default state in Economics 101. So-called perfectly competitive markets achieve equilibrium when producer supply meets consumer demand. Every firm in a competitive market is undifferentiated and sells the same homogeneous products. Since no firm has any market power, they must all sell at whatever price the market determines. If there is money to be made, new firms will enter the market, increase supply, drive prices down, and thereby eliminate the profits that attracted them in the first place. If too many firms enter the market, they’ll suffer losses, some will fold, and prices will rise back to sustainable levels. Under perfect competition, in the long run no company makes an economic profit.
To understand the importance of this epistemological revolution—f i rst the creation and consolidation of the concept of the so-called two cultures, and then within it the triumph of sci-entif i c universalism—one must situate it within the structure of our modern world-system. It is a capitalist world-economy. It has been in existence for some fi ve hundred years and has ex-panded from its initial locus (parts of Europe plus parts of the Americas) to incorporate by the nineteenth century the entire globe in its orbit, becoming the only historical system on the planet. Like all systems, it has had a life: its period of origin, its longish period of ongoing functioning, and its current terminal structural crisis. During its period of normal functioning, it op-erated by certain rules or constraints within certain physical boundaries that expanded over time. And these characteristics allow us to call it a system. Like all systems, however, it evolved in observable ways that permit us to label it a historical system. That is to say, its description along its itinerary, while retaining some basic systemic features, was always changing or evolving. We can describe its systemic features in terms of cyclical rhythms (changes that return to an equilibrium, perhaps a moving equi-librium), and its historical evolution in terms of secular trends (changes that move away from the equilibrium, eventually far from the equilibrium).
In our wildest aberrations we dream of an equilibrium we have left behind, which we naively expect to find at the end of our errors. Childish presumption which justifies the fact that child-nations, inheriting our follies, are now directing our history.
Resource Allocation: Scarce resources are allocated in response to changes in price. If there is an increase in the price of a good (...) then this signals to producers that consumers wish to buy this good at greater amounts. This will lead to an upward shift in the demand curve and raise the equilibrium price. As producers are rational and wish to maximize their profits, the higher price will provide the incentive needed to convince producers to produce more of the good.
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As we know, the equilibrium may be moved by any "outside disturbance". In the case of demand and supply, this would be a change in one of the determinants of demand or supply, other than the price of the product, which would lead to a shift of either one of the curves.
Supply Curve (R) + Demand Curve (R) = Equilibrium Price (Uncertain), Equilibrium Quantity (+)
SC (R) + DC (L) = EP (-), EQ (U)
SC (L) + DC (R) = EP (+), EQ (U)
SC (L) + DC (L) = EP (U), EQ (-)
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Efficiency is the property of a resource allocation of maximizing the total surplus received by the society. The equilibrium in free markets is efficient because:
i) The equilibrium quantity output maximizes total surplus received by all members of the society.
ii) The goods are produced by the producers with the lowest cost.
iii) The goods are consumed by the buyers who value them most highly.
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