Microeconomics
Microeconomics
11th Edition
ISBN: 9781260507140
Author: David C. Colander
Publisher: McGraw Hill Education
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Chapter 16, Problem 11QE
To determine

Network externalities and the winner-take-all nature.

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In which market structure might uniqueness be the most important? Why? In which market structure might uniqueness be the least important? Why? Can you name at least one business or service in your community that is an example of (near) perfect competition? Consider the current evolution of these two structures (perfect competition vs. monopoly) in an expanding global-enterprise environment. Which do you think will be more advantageous?
If all assumptions of perfect competition hold, why would firms in such an industry have little incentive to carry out technological change or much research and development?
The salmon fishery on Vancouver Island has historically been one of the world’s richest. Over the past few years, poor returns of salmon to the island and competition from farm-raised salmon have reduced the profit realized by the fishermen. One response to lower revenues has been for fishermen to use family members instead of hiring crew “in order to reduce their costs.” What do you think about this business strategy? Will employing relatives really keep profits from falling? Under what conditions will this a good strategy?
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