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Reading book：<<from zero to one>> （I）
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<<From zero to one>> is a nice book which inspires you to think about the business we deal with everyday, but at the same time so a few people would hanldle it well. It is great to read the book, by Peter Thiel, the founder of Palpay, the investor in hundreds of famous startups, and teacher at Stanford as well. I am not sure whether it would be a bestseller for a long time or just a moment, anyway, it would be my pleasure to share the book with my friends here.
In the series of the Reading book, I'd like to talk about the thoughts which really shock me or meaningful to me, I will be so glad if it was useful to you guys too. And today, the topic is the difference between perfect competition and monopoly.
First of all, perfect competition means: market determines the prices, firms only supply the things their consumer demand and they should compete with each other. These lead to the result that competition will finally reduce the profit. So, it would be difficult for firm to survive in the circumstance of perfect competition.
The question is: Will the competition market go to die out or monopoly finally, if most of firms in the market went broke? Author of the book chose to ignore it. But we can find the answer in the following paragraph.
According to the book, monopoly, especially the creative monopoly means the condition of every successful business. For no competor in the same market, the monopoly hold the power to decide the supplyment and the price, which bring them huge profit. Based on the money, they can afford to better products. Therefore, monopoly is not so called "killer of competition", but the incentive of better world.
It is the first time to learn that the great advantage of monopoly to society. However, it is just one side of the coin, we can not make the conclusion when the proof is still far from abudance. It is an interesting discovery, anyway.
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Post comment Comment (5 replies)
- Reply teadrinking
- Something like that as you said, and it seems to be a good book, thanks for your share.
- Reply Scarlett_Lin
- Well, my major is related to finance and I have touched those topics. I think perfect competition and monopoly are only two kinds of market model, there are still oligopoly and imperfect competition and maybe some kinds undiscovered. I think it is hard to identify which market belongs to which market model, but it depends on the merchandise's characteristic, how it is needed, how it is produced etc. Keep going on that, it is very interesting to look depth into this part.
- Reply sunnyv
- Unfortunately, the statistics show that most new business startups fail and only very few are successful. Competitions is indeed tough.
