This means that once the transfer agents at the bank medallion stamp the bond, it is highly liquid on the second market. Thus, a bond is a form of loan or IOU: the holder of the bond is the lender (creditor), the issuer of the bond is the borrower (debtor), and the coupon is the interest. Bonds provide the borrower with external funds to finance long-term investments, or, in the case of government bonds, to finance current expenditure.
Chamberlainâs monopolistic competition is the blending of competition and monopoly. The most distinguishing feature of monopolistic competition is that the products of various firms are not identical but different although they are close substitutes for each other.
There are cases in which, by first mover advantage, a firm takes over an entire market. Once it dominates the market,it charges a monopoly price. A firm can be so dominant that no effective competition is possible. Breaking the firm up could create competition, to the benefit of all except the monopoly itself.o those commenters who are using natural monopoly as a counter-example, I am pretty sure Bryan had that in mind when he stated criterion number two: If the monopoly came from superior efficiency, broadly defined. In the case of a natural monopoly, a single firm is the efficient solution.