Study Guide to Man, Economy, and State with Power and Market

Chapter 10: Monopoly and Competition 129
Yet this theory makes no sense. Why would firms
deliberately construct factories that operate at lowest
cost above the long-run planned level of output? The
basic trick of the neoclassical argument relies on geometry,
not economics. If we drop the assumption of smooth
cost curves, it is no problem reconciling a downward
sloping demand curve with operation at minimum ATC.
C. Chamberlin and Selling Cost
There is no important distinction between production
and selling costs. Advertising does not “create” consumer
demands for products that people don’t really
“need.” On a free market, consumers are free to spend
their money however they wish.
6. Multiform Prices and Monopoly
Once we take into account transactions costs, it is possible
for multiple prices to exist even for “the same” good. However,
this is not an infringement on consumers’ sovereignty; some
consumers would rather risk paying higher prices in exchange
for not spending time researching all relevant sellers.
7. Patents and Copyrights
On a free market, there would be no analogue to the patent;
someone who independently discovers a technological recipe
would be free to begin using it immediately. However, there
would be copyrights, in the sense that it would be illegal to
fraudulently impersonate another individual when selling a
good or service.