Today is Tuesday, November 23, 2010.
The price of gold closed at $1,377
per troy ounce.
The Dominant Firm and the Competitive Fringe
One of the numerous solutions to the oligopoly model is known as
dominant firm and the competitive fringe
There are a lot of personal
computers available to consumers today, including desk-tops, lap-tops, Macs,
and so on.
At one time there were no personal computers available, just as
at one time there were no automobiles available.
The first big producer of
personal computers was IBM, with their IBM PC-XT.
The IBM dominated the
market, but it was expensive, and a lot of small competitors sprang up and
entered the industry.
Many of these competitors were small, one- or two-
person operations, working out of basements and garages, making PC's from
mother-boards, cases, graphics cards, chips, drives, and everything else
needed, that they obtained from a multitude of different parts suppliers (many
originating in the Pacific Rim).
Note that what a PC purchaser is purchasing is
the services provided by a
PC, not the PC per se
Demanders of PCs want fast processors, good
graphics, portability, good word-processing, reliability, and all the other good
things we get from owning and using PCs.
If a 1983 IBM PC-XT would
operate perfectly for five years (it did) and has a price tag of $5,000, you
could get the same services by buying a cheaper, less reliable