Musings about Monopolies (1)

Economics really galvanizes the soul. Common sense such as "OMG I REALLY WANT THIS HAWT TOP BUT OTHER PPLZ WANT THIS HOT TOP AS WELL SO PRICE SO HIGH NOW" can be expressed succinctly in statements like- Demand increases, leading to shortage, putting an upward pressure on price, price increases, new equilibrium price reached. How positively academically rigorous. In the Demand curve, we see that DD shifts to the right, thus we have DD1, intersecting SS at a new position, and thus the initial price Pe now becomes Pe1, and Qe becomes Qe1... ... In other words, we take crap that most people, even idiots and nay infants can come to reason out through reflection following empirical observation and make it sound smart. And then we articulate it really well. In real life this supposedly earns you bucketloads of money. In JC it means you just might pass your Block Test.

Our lecture group has plodded over to the topic on Monopoly, following other Oscar hits such as Cost Theory, Size of Firms, Introduction to Market Structures, and Perfect Competition. Sounds positively mind-bending, doesn't it? I'm sure it does. There are tons of curves to draw, not THOSE kinds of curves to those not in the right frame of mind, but THOSE kinds of curves. See, there are two main kinds of curves that might interest a guy. One is situated on the lower torso portion of the female anatomy, and is a sight that many sexually overcharged young men devoid of any kind of contact with the opposite gender may take a gander at on any friendly porn, I mean, artistic site on the net. The other is something far more interesting. Curves such as the Average Cost Curve, Marginal Cost Curve, Long Run Average Cost Curve, and so on and so on, are guaranteed to provide hours of delight for idealistic young JC student. Who can resist painstakingly etching out curved lines all over a bit of foolscap, with the resulting product looking like a child's doodle? (Explains gaffes like the subprime crisis if Economists use these curves to make real impactful decisions, like lowering mortgage rates!) Then we can draw dotted lines all over intersections of the other squiggly lines and assign random alphabets or combinations of alphabets, shade some crap, and label them with random names such as Profit or Deadweight Loss! Whoopee! I wonder if Hwa Chong would consider offering H2 Prata Making as an Arts Subject? They could pair it with the Ice-Cream Prata and Thosai H3 Module that's making waves in Sunshine Institute.

But back to Monopoly. What is a Monopoly? The board game? That is pretty fun. Fun Economics, an oxymoron, or a logical contradiction. But seriously, we're having a blast taking over people's imaginary properties in tutorials. Great way to prep yourself for real life. However, everyone's favorite dictionary site, MW, defines a monopoly as:

Main Entry: mo·nop·o·ly
Pronunciation: \mə-ˈnä-p(ə-)lē\
Function: noun
Inflected Form(s): plural mo·nop·o·lies
Etymology: Latin monopolium, from Greek monopōlion, from mon- + pōlein to sell
Date: 1534
1 : exclusive ownership through legal privilege, command of supply, or concerted action
2 : exclusive possession or control
3 : a commodity controlled by one party
4 : one that has a monopoly

Huh. Better than the board game?

Anyway, to better put the term into perspective, let us examine an actual case study in some random school compound somewhere in Singapore.

A canteen stall that goes by the name of Laugh Me Me (or some approximation of that) has been charging perfectly reasonable prices for their product, which we shall term as economic (economic as in cheap) rice, despite the fact that they are the sole suppliers of a... not-so-unique product (but they can produce high legal barriers to entry!). Well... sole as in the sole supplier for 800+m, since one can always sojourn to the canteen of some other nearby compound for a cheaper and more efficient product, but we proceed under the assumption that we all lack boundless amounts of time to frolick out in the wastes.

So let's see... a typical plate of four dishes will cost the customer $2.50-$3, with a savory three piecess of meat, four strands of vegetables, and an egg (but lots of rice!). Perfectly reasonable, considering they operate a monopoly, meaning that they can jack up prices all they want and the consumers can't do crud, because they love their seemingly cheap yet expensive rice with random dishes. If it was me, I would probably have set the price for four dishes at a minimum of $6, but these people clearly lack economic sense. I don't understand all the grousing spewing forth from other venerable consumers. So what if another establishment over at yonder is 33% cheaper and provides 42.1111% more quantity, and arguably quality? Remember that we do not all possess boundless amounts of time to prance along the walkways to yonder compound, unlike some elite and clearly more intellectual giants who might find themselves with time to avail on Wednesdays. So we can all just plod along and meekly fork out our hard-earned, or our parents' hard-earned moolah for our food, ok? That or someone should pen a diatribe full of vitriol and laden with suitably impressive adjectives in favor of imposing a PRICE CEILING (YOU CAN ONLY SELL AT THIS HIGHEST PRICE, HAHAHA) and dash it off to the authorities who might be suitably impressed. Otherwise just keep to the status quo, and let the intellectual giants wander off to far-away lands in search of better tidings.

Yeah, so anyway, example of a monopoly. I really prefer the board game.