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.