YouNotSneaky’s at it again. Why might prices be more stable under monopolies (and why might we care)?
Here’s my favorite line:
Probably less explicitly but more importantly, when prices keep changing on you it means you’ve gotta recalculate your optimal allocations of expenditure again. You gotta set up a new Lagrangian, take the damn first order conditions and figure out if making out the adjustments in your optimal consumption basket – given your income – are worth it. What? You don’t think that way? You don’t set up constrained Lagrangians every time there’s a change in prices and compute your Kuhn-Tucker conditions?