Spiritual solutions to economic problems are discovered by an understanding that the divine microeconomy is built upon a tapestry of human virtues.
Sunday, August 18, 2013
Cartels And Monopolies Cannot Form In A Free Market.
Since firms face a more elastic demand curve than
does an industry the equilibrium forces inherent in the market economy would
tend to break any attempt to form a cartel. This is because: if a firm charges
a lower price than the cartel price the result would be a significant change in
the quantity demanded from the firm (drawing buyers industry-wide) and total
revenue would increase for the firm. The increased total revenue is an
irresistible incentive, enticing a firm to break the cartel.