ABSTRACT
Recent developments in economics make available two approaches to the study of economic exchange. Microeconomics initially concentrated on modeling trading processes as markets. Within this framework, attention was devoted to examining how behavior was affected by market structure. When considering the theory of the firm, for example, particular attention was given to the differences between perfect and imperfect competition. Key findings include that a firm will set its price equal to marginal cost if and only if it is perfectly competitive, and that the outcome will be efficient if and only if the market is perfectly competitive.
