Principles of Economics- Mankiw (5th) 324

Principles of Economics- Mankiw (5th) 324 - 334 PA R T F I...

Info iconThis preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
334 PART FIVE FIRM BEHAVIOR AND THE ORGANIZATION OF INDUSTRY DOING NOTHING Each of the foregoing policies aimed at reducing the problem of monopoly has drawbacks. As a result, some economists argue that it is often best for the govern- ment not to try to remedy the inefficiencies of monopoly pricing. Here is the as- sessment of economist George Stigler, who won the Nobel Prize for his work in industrial organization, writing in the Fortune Encyclopedia of Economics: A famous theorem in economics states that a competitive enterprise economy will produce the largest possible income from a given stock of resources. No real economy meets the exact conditions of the theorem, and all real economies will I N MANY CITIES , THE MASS TRANSIT SYSTEM of buses and subways is a monopoly run by the local government. But is this the best system? Man with a Van B Y J OHN T IERNEY Vincent Cummins looks out from his van with the wary eyes of a hardened crimi- nal. It is quiet this evening in downtown
Background image of page 1
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 07/30/2010 for the course ECON 120 taught by Professor Abijian during the Spring '10 term at Mesa CC.

Ask a homework question - tutors are online