Chapter 17

I would give this chapter a one out of three because it mostly dealt with concepts that we have talked about it previous chapters. It was also very logical in determining how firms would act, and how firms would want to act. While it mostly focused on duopolies, this thinking can be translated to any small number of firms. The dynamic between self interest conflicting with the interests of others was interesting. Members of a cartel both want to raise their own output, while keeping the output of the group as a whole, lower. The methods that are used to keep prices low were also interesting. Of course as a consumer I should mostly want business practices to be competitive, but it's still interesting seeing how firms interact nonetheless. The part about predatory pricing was also fun to read as I've always thought it was a very viable business strategy, but now I can see one way the smaller company could survive the price cuts.

Chapter 16

I would give this chapter a 1.5 out of 3 because it built on many of the previous concepts that we have already learnt. As the name might suggest, competitive monopolies take traits from both perfectly competitive markets and monopolistic markets. We were also introduced to oligopolies for the first time in this chapter, a market which appears to share many characteristics of a monopoly. In the short run competitive monopolies function more like a monopoly but in the long run they function more like a perfectly competitive market because of firms entering and exiting the market, causing economic profit to return to zero. Excess capacity relates to the output rule with monopolies because they don't operate at the efficient scale as to keep their price up. As we see towards the end of the chapter, evaluating and solving inefficiency that competitive monopolies create can be hard and nearly impossible.

Chapter 15

I would give this chapter a difficulty of 1.5. I thought that it seemed relatively simple and logical with its concepts and and it built a bit on what we had previously learned in other chapters. The chapter showed the social costs of monopolies and how they can arise. The three main reasons were from the government, from being a "natural monopoly", or from the less common monopoly based off of the control of resources. Monopolies can have a detriment to welfare and cause dead-weight loss however because of the price being higher than the socially efficient quantity. Monopolies can also be positive however in the sense that they increase the incentive for research and in the case of natural monopolies, can reduce prices for the consumer. If monopolies are well managed and regulated they can be positive sometimes but it's the government's job to ensure that this happens.