Document Summary
Chapter 9 - the entrepreneur and the market process. Firms and centrally planned economies share the same centralized power, where norms, organization and structure lower transaction costs and increase productivity. Compare equilibrium strategy (described in chapters 7 and 8) to entrepreneurial strategy. There is a difference in equilibrium strategy and entrepreneurial strategy. Chapter 10 - strategies with respect to government. If you can, explain why you consider it a natural monopoly. A natural monopoly occurs when the most efficient number of firms in the industry is one. This happens when the long-run costs associated with that firms product/service is lowered by concentrating output on one firm, or where there are very high fixed costs. Railroad networks is an example of a natural monopoly because they include very high entry costs, and long-run costs of running these services is greatly lowered if one firm is takes over the entire industry.
