Price elasticity of supply vs Monopoly
In today MME lecture, Dr. Tan mentioned the price elasticity of supply is related to antitrust case. Anyone who have studied Price theory should know there is no such thing as supply curve in Monopoly market, so how come there is an elasticity?
Asking her directly after class, she begin the explaination with regarding to Stigler. Her claim is from one of thesis of GJS, which argues when the price elasticity of the "potential" suppliers is high, it is unlikely that industry is a Monopoly.
Vesper quickly reminded me that is a combination of the perfect competitive model and monopoly theory, which is an interesting application of price theory. For this good follow up question, I own him an answer.
Asking her directly after class, she begin the explaination with regarding to Stigler. Her claim is from one of thesis of GJS, which argues when the price elasticity of the "potential" suppliers is high, it is unlikely that industry is a Monopoly.
Vesper quickly reminded me that is a combination of the perfect competitive model and monopoly theory, which is an interesting application of price theory. For this good follow up question, I own him an answer.
posted by Outlaw at 2:00 am
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