The size of a firm influences its competitive policies in a number of ways. In the first place the scale of its purchases and sales relative to the total volume of transactions in the firm's market is one indication of the extent of its market control. Taken in conjunction with other data it may throw a good deal of light on price and production policies. Certain authorities, on the other hand, brush aside figures on the relative size of firms as irrelevant and emphasize the decisive importance of the elasticity of the firm's demand curve. 3 It would no doubt be extremely convenient if economists knew the shape of individual demand and cost curves and could proceed forthwith, by comparisons of price and marginal cost, to conclusions regarding the existing degree of monopoly power. The extent to which the monopoly theorists, however, refrain from an empirical application of their formulae is rather striking.
Edward S. MasonRelated topics
aside authorities certain conjunction control cost curve datum deal degree doubt elasticity good light marginal market monopoly number place power proceed production size take throw waysRelated quotes
Microeconomics, including the study of individual choice and of group choice in market and nonmarket processes, has generally been considered a field science as distinct from an experimental science. Hence microeconomics has sometimes been classified as "non-experimental" and closer methodologically to meteorology and astronomy than to physics and experimental psychology (Marschak, 1950, p. 3; Samuelson, 1973, p. 7). But the question of using experimental or nonexperimental techniques is largely a matter of cost, and generally the cost of conducting the most ambitious and informative experiments in astronomy, meteorology, and economics varies from prohibitive down to considerable. The cost of experimenting with different solar system planetary arrangements, different atmospheric conditions, and different national unemployment rates, each under suitable controls, must be regarded as prohibitive.
Vernon L. Smith
Globalization creates interlocking fragility, while reducing volatility and giving the appearance of stability. In other words it creates devastating Black Swans. We have never lived before under the threat of a global collapse. Financial Institutions have been merging into a smaller number of very large banks. Almost all banks are interrelated. So the financial ecology is swelling into gigantic, incestuous, bureaucratic banks - when one fails, they all fall. The increased concentration among banks seems to have the effect of making financial crisis less likely, but when they happen they are more global in scale and hit us very hard. We have moved from a diversified ecology of small banks, with varied lending policies, to a more homogeneous framework of firms that all resemble one another. True, we now have fewer failures, but when they occur... I shiver at the thought.
Nassim Nicholas Taleb
The personality market, the most decisive effect and symptom of the great salesroom, underlies the all pervasive distrust and self-alienation so characteristic of metropolitan people. Without common values and mutual trust, the cash nexus that links one man to another in transient contact has been made subtle in a dozen ways, and made to bite deeper into all areas of life and relations. People are required by the salesman ethic and convention to pretend interest in others in order to manipulate them. In the course of time, and as this ethic spreads, it is got on to. Still, it is conformed to as part of one;s job and one's style of life, but now with a winking eye, for one knows that manipulation is inherent in every human contact. Men are estranged from one another as each secretly tries to make an instrument of the other, and in time a full circle is made: one makes an instrument of himself and is estranged from it also.
C. Wright Mills
Just as the human population was starting its unprecedented growth spurt in the late eighteenth century, this was published. It's a first edition of an essay on population by the English clergyman Thomas Malthus. Malthus made a very simple observation about the relationship between humans and resources and used it to look into the future. He pointed out that "the power of population is indefinitely greater than the power of the earth to produce subsistence for man." Food production can't increase as rapidly as human reproduction. Demand will eventually outstrip supply. Malthus goes on to say, if we don't control human reproduction voluntarily, life could end in misery, which earned him a reputation as a bit of a pessimist. But Malthus' principle remains true. The productive capacity or the Earth has physical limits and those limits will ultimately determine how many human beings it can support. m10s58-m12s18.
David Attenborough
The misconception that costs determined prices prevented economists for a long time from recognizing that it was prices which operated as the indispensable signals telling producers what costs it was worth expending on the production of the various commodities and services, and not the other way around. It was the costs which they had expended which determined the prices of things produced.It was this crucial insight which finally broke through and established itself about a hundred years ago through the so-called marginal revolution in economics.The chief insight gained by modern economists is that the market is essentially an ordering mechanism, growing up without anybody wholly understanding it, that enables us to utilize widely dispersed information about the significance of circumstances of which we are mostly ignorant. However, the various planners (and not only the planners in the socialist camp) and dirigists have still not yet grasped this.
Friedrich Hayek