Ask Prof Wolff: Free Markets & Monopolies

A Patron of Economic Update asks: "In college many years ago I took a couple introductory courses in economics. There I learned that a free market was a market with perfect competition where buyers and sellers could freely enter the competition. From this definition, it followed that a free market would set the price on a good so that supply equaled demand. And there was enough of a discussion on this definition to conclude that a monopoly or oligopoly could not exist in a free market; moreover it was generally understood that government oversight and regulation was needed to maintain a free market. Today, however a free market has been re-defined as a market without government interference of any sort.  My question then is how economics is taught today; it would seem that with this new definition of a free market, just as with perfect competition, any significance of the supply and demand curve intersection would be irrelevant."

This is Professor Richard Wolff's video response.

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