This flashcard is just one of a free flashcard set. See all flashcards!
65
Economic theory suggests that monopoly will increase price and decrease quantity. However, from 1864 to 1914, real prices were falling and output was increasing in manufactured goods, transportation, and financial services. Why is that?
Explain:
5) Diversification meant availability of substitutes
Explain:
5) Diversification meant availability of substitutes
Goods with more substitutes have a more price elastic demand, so it limited the market power of a monopoly firm
Flashcard info:
Author: savhighsmith
Main topic: Economics
Topic: History of Economics
School / Univ.: UGA
City: Athens
Published: 12.10.2010