Econ 155 - Matewan

Econ 155 - Matewan - Alex Ryng Professor Pecsok Intro. to...

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Alex Ryng Professor Pecsok Intro. to Micro. 12/15/06 “Matewan,” from an economic perspective, offers a lot in insight into markets,  equilibrium and unions.  “Matewan” is not an example of perfect competition.  Perfect  competition requires that both buyers and sellers are price takers, the number of firms is  large, there are no barriers to entry, firms’ products are identical, there is complete  information and firms are profit maximizing.  In “Matewan,” “The Company” had  market power.  “The Company” sets the price per ton of coal rather than accepting the  market value per tonnage.  Abusing the market power while setting wage rates arbitrarily  low, discriminating against minorities and controlling the lives of the miners allows “The  Company” to unjustly reap higher profits.  With the market power, “The Company” had  few barriers to becoming unstoppable.  The union was the only thing that could  compromise the success of “The Company.”  
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Econ 155 - Matewan - Alex Ryng Professor Pecsok Intro. to...

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