Tuesday, May 01, 2007

Chapter 6 "The Technology of Civil society

Paul, Starr. A Creation of the Media

"As dynamic this folded, prices for the telephone service fell sharply.
Independent phone companies generally offered lower rates than Bell, and though
Bell cut its rates every where, they were lower where it faced rival. Overall,
from 1895, to 1909, the revenue that Bell received per phone dropped by 55
percent, Bell claimed that the cause of lower rates was primarily improved
efficiency, not competition. Competition created pressure on Bell, however, not
only to become more efficient, but also to adapt equipment, services, and rate
plans to meet demands for low-cost-service. Bell intorduce a less expensive
phone set for rural use, and it expaneded party lines in order to make service
available on cheaper basis"(Starr, 202).

This passage is taking about when the supply is to much the demand goes down. In other ways it is talking about when the competition gets to much the seller needs to lowere its standards to make the costumer happy. The rise of the telephones was booming and everyone wanted to create their own version so everyone started selling it at a lowere price. Bell wanted to keep his costumers and also gained new ones so he had to make improvements like he said it was not based on competition but on how efficient the phone was to his consumers.


At 11:15 PM, Blogger A. Mattson said...

Please spell-check and proof read your posts before publishing.

Starr is discussing the competition in the telephone industry. Bell becomes a monopoly. What are the positive results of having a national telephone monopoly? What are the negative consequences? Should the state have nationalized the telephone industry?

Should the monopoly have been broken up? Why wasn't it? Does big mean efficiencies of scale that a small telephone company couldn't match?


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