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.