I recently came across these short videos on various economics topics. I have not seen them all and have some quibbles about the ones I have seen, but over all they seem pretty good at an introductory level. Here is the one on monopolies.
Thanks for sharing Mike, this is an interesting video. When reading about monopolies in the book and listening to the examples mentioned in the video, I thought of the recent failed merger between GE and Electrolux.
"The $3.3 billion deal fell through after an antitrust lawsuit from the US Department of Justice, which alleged that the sale would result in significant price increases for shoppers. The DOJ argued that, together with rival Whirlpool, a combined GE and Electrolux would have a duopoly on the U.S. cooking appliance market" (Barry, 2015).
I think this is a perfect example of the government doing its best to regulate one or two companies from taking over the appliance industry. However, I would be curious to see how this merger would play out as Whirlpool would still present some intense competition forcing Electrolux to set its prices fairly. But if both companies raised their prices, I can see how this would be detrimental for consumers. Furthermore, because of the immense size of both of these companies it might be a considerable amount of time before more companies entered the industry at the same level and made demand more elastic. Yet, look how quickly Samsung has made its appearance here.
Barry, Keith. (2015 December 07). What the GE/Electrolux Meltdown Means for Consumers. Retrieved from http://laundry.reviewed.com/news/ge-appliance-ends-sale-to-electrolux-amid-controversy
Thanks for sharing Mike, this is an interesting video. When reading about monopolies in the book and listening to the examples mentioned in the video, I thought of the recent failed merger between GE and Electrolux.
ReplyDelete"The $3.3 billion deal fell through after an antitrust lawsuit from the US Department of Justice, which alleged that the sale would result in significant price increases for shoppers. The DOJ argued that, together with rival Whirlpool, a combined GE and Electrolux would have a duopoly on the U.S. cooking appliance market" (Barry, 2015).
I think this is a perfect example of the government doing its best to regulate one or two companies from taking over the appliance industry. However, I would be curious to see how this merger would play out as Whirlpool would still present some intense competition forcing Electrolux to set its prices fairly. But if both companies raised their prices, I can see how this would be detrimental for consumers. Furthermore, because of the immense size of both of these companies it might be a considerable amount of time before more companies entered the industry at the same level and made demand more elastic. Yet, look how quickly Samsung has made its appearance here.
Barry, Keith. (2015 December 07). What the GE/Electrolux Meltdown Means for Consumers. Retrieved from http://laundry.reviewed.com/news/ge-appliance-ends-sale-to-electrolux-amid-controversy
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