Comparing Monopoly and Competition


(Source: p. 368, see below)

Comparisons between monopoly and competition, . . ., must be made gingerly. One is liable to fall into nonsense of the sort “If my grandmother had wheels she would be a tram.” (p. 366)

McCloskey, Donald N. The Applied Theory of Price. 2nd ed. New York: Macmillan Publishing Company, 1985.
The usual assumption in price theory texts is that the cost structure would be the same for an industry whether it was competitive or monopolized. The graph above, from McCloskey, is the only one I am aware of that tries to represent the realistic possibility that costs may be significantly lower in monopoly. Usually we think of new goods resulting from creative destruction, but Schumpeter also emphasized new processes, and the new processes presumably would often reduce costs.

Infinite Jobs to Be Done

Marc Andreesen was the cofounder of Netscape.

“If you believe human wants and needs are infinite,” said Andreeseen (sic), “then there are infinite industries to be created, infinite businesses to be started, and infinite jobs to be done, and the only limiting factor is human imagination. The world is flattening and rising at the same time. And I think the evidence is overwhelmingly clear: If you look over the sweep of history, every time we had more trade, more communications, we had a big upswing in economic activity and standard of living.” (p. 231)

Friedman, Thomas L. The World Is Flat: A Brief History of the Twenty-First Century. New York: Farrar, Straus and Giroux, 2005.

Cable about to “get leapfrogged”

We’re playing offense, not defense when competing against the Bells,” says Brian Roberts, chief executive of Comcast, the country’s largest cable operator with over 21 million subscribers.
The technological arms race is further evidence that television is entering a new content- and feature-rich era. Early signs of this transition were the introduction of TiVo and other digital video recorders and video-on-demand services that enable viewers to watch shows whenever they want.
But many more new products and services are in the works by businesses using Internet technology to combine the functions of TVs, computers, the Internet and telephones. Cable has to make sure it doesn’t get leapfrogged. “This is about totally changing this industry,” says Lea Ann Champion, senior vice president of phone giant SBC Communications Inc.

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