This document summarizes key points from Robert P. Murphy's lecture on the second half of Chapter 10 of Man, Economy, and State. It discusses several topics: 1. The illusion of monopoly price and definitions of monopoly. It argues that a true monopoly price requires initial competitive pricing on the inelastic portion of demand. 2. Unions and their impact on restrictive wages. It questions whether unions can be considered voluntary. 3. Monopolistic competition and how arguments for it flip standard economic theories. It also discusses jagged cost curves in this context. 4. A comparison of patents versus copyrights and their impacts on the market.

1. Money, Monopoly &
Market Intervention
Robert P. Murphy
Mises Academy
October 12, 2011
Lecture 2: 2nd
half of Chapter 10 of
Man, Economy, and State

2. 2nd
Half of
Chapter 10 of MES
1. Illusion of Monopoly Price
A. Definition of Monopoly
.
.
2. Unions and Restrictionist
Wages
III. Monopolistic Competition
IV. Patents vs. Copyrights

3. I. Illusion of
Monopoly Price

4. A. Definitions of
Monopoly/Monopolist
“Can control its price.”
“The only seller of a given good.”
“A grant of special privilege by the
State, reserving a certain area of
production to a group or individual.”
“Person who has received a
monopoly price.”

5. B. Is a Trademark a
Gov’t Monopoly?

6. C. Review: Neoclassical
Monopoly Theory
Rothbard, following Mises, stresses that monopoly
price can only occur if original “competitive” price
occurred on inelastic portion of demand curve.
But current neoclassicals would disagree. Even if
Total Revenue goes down by restricting output, it
makes sense to do so (on the margin) because
Total Costs fall too. Thus Profit goes up, even if
monopolist reduces output from a point originally
on the elastic portion of the demand curve.

7. D. Monopoly Profit vs.
Monopoly Gain

8. E. Cutthroat Competition

9. F. No Such Thing as
“Competitive” Price!

10. G. Why not P=MC?

11. II. Unions and “Restrictionist” Price

12. Voluntary Unions?

13. III. Monopolistic Competition

14. A. Flipping the Argument…

15. B. Jagged Cost Curve

16. IV. Patent vs. Copyright