Perfect competition is the only market form in which price discrimination would be impossible ( a perfectly competitive company has a perfectly elastic demand curve and has zero market power ).
12.
On the other hand, a competitive firm by definition faces a perfectly elastic demand, hence it believes \ eta = 0 which means that it sets price equal to marginal cost.
13.
This reflects the basic change in the VOC's circumstances that had occurred : it now operated in new markets for goods with an elastic demand, in which it had to compete on an equal footing with other suppliers.
14.
According to Ramsey, as to minimize deadweight losses, one must increase prices to rigid and elastic demands in the same proportion, in relation to the prices that would be charged at the first-best solution ( price equal to marginal cost ).
15.
Beside discussing descriptive issues such as which nations tended to benefit more in a system of trade based on comparative advantage ( Mill's answer : those with more elastic demands for other countries'goods ), the work also discussed normative issues such as ideal systems of political economy, critiquing proposed systems such as communism and socialism.
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