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61
Economic theory suggests that monopoly will increase price and decrease quantity. However, from 1864 to 1914, real prices were falling and output was increasing in manufactured goods, transportation, and financial services. Why is that?
Explain:
1) Firms grew, but so did markets
Explain:
1) Firms grew, but so did markets
Monopoly power depends on the size of the firm relative to the market and cheapening transportation brought firms into competition with local businesses, expanding markets.
Flashcard info:
Author: savhighsmith
Main topic: Economics
Topic: History of Economics
School / Univ.: UGA
City: Athens
Published: 12.10.2010