The Link Between Market Structure and Income Inequality
Analyze the economic mechanism through which a sustained decrease in competition among firms in an economy can contribute to a rise in overall income inequality. In your explanation, be sure to describe the intermediate effects on firms' pricing behavior and the division of income between labor and capital.
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Economics
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Introduction to Macroeconomics Course
Ch.2 Unemployment, wages, and inequality: Supply-side policies and institutions - The Economy 2.0 Macroeconomics @ CORE Econ
The Economy 2.0 Macroeconomics @ CORE Econ
CORE Econ
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Analysis in Bloom's Taxonomy
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Extent of Falling Competition's Contribution to Rising Inequality
An economist observes that over the past 30 years in a particular country, the gap between the prices firms charge and their production costs has widened. During the same period, the portion of national income paid to workers has decreased, while the portion going to company owners has increased. Based on the relationship between market structure and income distribution, which of the following is the most likely underlying cause of these trends?
An economy experiences a broad decline in competitive pressures within its goods and services markets. Arrange the following events to show the logical sequence of how this change is expected to affect the distribution of income.
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The Link Between Market Structure and Income Inequality
Shift in Economic Power from Workers to Firm Owners
Figure 2.23: The Gini Coefficient for Market Income in the US (1913–2019)
Predicted Rise in Unemployment from Declining Competition