Chapter Preview: In Chapters 5 and 6, we examined the consequences of having production organized through perfectly competitive industries and discovered that perfect competition gave society generally beneficial results, through the operation of what Adam Smith termed the “invisible hand” of self-interest. However, perfect competition is a rare beast in the real world, and in this chapter, we turn our attention to the other end of the competitive spectrum—monopoly, the market structure in which one firm dominates the industry.
By the end of this chapter, you will be able to:
• Specify the conditions that may permit the development of a “single-seller” monopoly, and using the two broad types of barriers to entry, identify ...
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