13GottAntitrustShow

13GottAntitrustShow - Antitrust and Regulation Conservative...

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13 - 1 Antitrust and Regulation Conservative and Liberal Views -- Review Regulating a natural monopoly “Fair” price or Marginal cost pricing Public Ownership Antitrust legislation
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13 - 2 Under perfect competition: P at lowest levels; high quality. Why? LR at minimum ATC Equilibrium Q -- greater than in other markets. But , small, dependent sector of economy. Most of economy : Oligopoly Monopoly Monopolistic competition
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Brief history 1870 - 80s : railroads couldn’t make profit. Too many built; too much competition! Price fixing: “Pooling” agreements Illegally agreed to fix prices. (Similar to cartels.) But cheating; they broke down. Why? High fixed costs; low MC. BUT: Rural, farm states: at mercy of railroads to ship to markets. A railroad had a monopoly in small, rural towns. Therefore, very high rates. Populist movement. (Farmers, workers) State regulation. Railroads
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This note was uploaded on 07/14/2010 for the course ECON 1 taught by Professor Bergstrom during the Fall '07 term at UCSB.

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13GottAntitrustShow - Antitrust and Regulation Conservative...

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