The Freeman 1972 - The Ludwig von Mises Institute

1972 ADVERTISING 519which your competitors are producingand selling it at a .lowerprice, not only in buying theidentical resource which your competitorsare buying and offeringa higher price. Competition meanssometimes offering a better product,or perhaps an inferior product,a product which is more inline with what the entrepreneurbelieves·consumers are in fact desirousof purchasing. It meansproducing a different model of aproduct, a different quality, puttingit in a ditferentpackage, sellingit in.a store with a differentkind of lighting, selling it alongwith an offer of free parking, sellingthrough salesmen who smilemore genuinely, more sincerely.It means competing in .many,many ways besides the pure pricewhich is asked of the consumer inmonetary terms.With freedom of entry, everyenterpreneur is free to choose theexact package, the exact opportunitywhichhe will lay beforethe public. Each opportunity, eachpackage has many dimensions. Hecan choose the specifications forhis package by changing many,many of these variables. The preciseopportunity that he will laybefore the public will be thatwhich, in his opinion, is moreurgently desired by the consumeras compared with that which happensto be produced by others. Solong as there's freedom of entry,the fact that my product· is differentfrom his does not mean that1·am a monopolist.A Disservice to EconomicsThe late Professor Edward H.Chamberlin of Harvard did economicsa great disservice in arguingthat because a producer isproducing a unique product,slightly different from what thefellow across .the street is producing,in some sense he is a monopolist.So long as there's freedomof entry, so long as the manacross the road can do exactlywhat I'm doing, the fact that heis not doing exactly what I'm doingis simply the result of his differententrepreneurial judgment.He believes that he can do betterwith his model. I believe I can dobetter with mine. I believe thatfree parking is more important toconsumers than fancy lighting inthe. store. He gives a differentpackage than I do. Not becausehe couldn't do what I'm doing, notbecause I couldn't do what he'sdoing, but because each believesthat he knows better what theconsumer is most anxious to acquire.This is what we mean bycompetition in the broadest sense,not merely price competition, butquality competition in its manifoldpossible manifestations.Professor Chamberlin popu-