Nature of Competition: Accounting for the Product Market
We idealize the apple as to be “the product” traded in “the market” of textbooks; while the exactly same unit of Golden Delicious (GD) as the “marginal unit” selling at a price of bilateral agreement. In addition, we take “the year” as the accounting period, or equivalently the traded units of GD (“ q ” for quantity) are counted per annum (PA). Most students of old-fashioned economics would not fail to call the “ q ” a “flow variable” yet to be determined over the coming year. The aggregate value added in the year. As the apple is “the final good” available at the end of the supply chain, the gross communal revenue equals the aggregate value added of apples “at the market value.” Technically, value added at each firm is “the sales revenue after all the purchases of intermediate goods from other firms ”; consequently we might well assume all the firms in the chain to be a single firm by way of abstraction ( cf . Figure below). ...