Conditions of Entry and the Emergence of Monopoly
AN economist’s inquiry into the ‘forces making for and against monopoly ’ might reasonably involve a search for answers to the following questions with respect to enterprise economies: (1) What are the ‘ forces,’ whether tendencies of human behaviour or environmental circumstances, which favour or discourage the establishment and stable maintenance of monopoly? (2) Why and in what way do these ‘forces’ affect the prospect of monopoly, and is the character of any of them strategic to its emergence? (3) What is the relative importance of the various forces identified — both in a priori logic and in fact? (4) Are there strategic controllable forces affecting the emergence of monopoly, through the manipulation of which public authority can limit the extent of monopoly?
KeywordsAverage Cost Entry Condition Monopoly Price Established Firm Potential Entrant
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- William Fellner’s Competition Among the Few, especially for its analysis of the counter-tendencies affecting the emergence of collusion, and Don Patinkin’s ‘Multi-Plant Firms, Cartels, and Imperfect Competition’ (Quarterly Journal of Economics, February 1947), for its analysis of entry phenomena under cartels. Much of the present analysis on the effects of the condition of entry on monopoly has grown out of this writer’s analysis in ‘A Note on Pricing in Monopoly and Oligopoly’ (American Economic Review, March 1949) and ‘Workable Competition in Oligopoly’ (ibid., May 1950).Google Scholar