1. According to the British Nobel prize-winner, Sir John Hicks, ‘the best of all monopoly profits is a quiet life’. Compare this view with Schumpeter’s hypothesis that firms with monopoly power are...

1. According to the British Nobel prize-winner, Sir John Hicks, ‘the best of all monopoly profits is a quiet life’. Compare this view with Schumpeter’s hypothesis that firms with monopoly power are the driving force in innovation.

2. Write a memo to a newcomer on a competition authority explaining why and under what circumstances monopoly is inferior, from an economic point of view, to competition. In your memo, comment on the EU Competition Commissioner’s assertion that ‘competition policy plays a key role in creating an environment that is favourable to business, this being crucial to lasting growth and job creation’ (XXVth Report on Competition Policy, Brussels, 1995).