Some Common Assumptions
Assume a perfect gas
Assume perfect competition
Assume individuals seek their own
self-interest
Assume no friction loss; assume
no heat loss
Assume the firm seeks to maximize
profit
Assume the firm seeks to maximize
shareholder value
Assume a bond will pay $100 interest
per year forever
Assume each investor has the same
information
Assume each investor is risk averse
Assume the earth is a plane (flat
surface)
Assume there is no tomorrow
Assume the fluid is incompressible
Assume the ambient temperature is
20 degrees celsius
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