Question

6. Milton Friedman once said that the social responsibility of a company is to earn a profit. Explain whether or not Friedman is correct.

7. Discuss the claim that social regulation is un- necessary. Does the claim depend on whether the structure of an industry is primarily one of perfect competition or of oligopoly?

8. Suppose a firm is selling a product for less than a foreign country does in the home country and an antidumping suit forces an end to the practice. Is it possible that the result is a loss in efficiency? Explain.

9. What is a natural monopoly? Can you think of an example of a natural monopoly? If you can, explain why you consider it a natural monopoly.

Answer 1

6According to me Friedman is correct and partially . There us a term called Corporate Social responsibility according to which a firm has to spend a certain part of earning for the benefit of poora say building toilets, schools , colleges , hospitals etc.If a firm undertakes such activity then yes it is social responsibility to earn profit.

Also there is a different logic as we know entrepreneur has less marginal propensity to consume out of income than workers . So entrepreneur consume less and keeps on investing which increses the income in economy and thus keeps the economy out of depression or recession.

**Please write for any doubt .kindly upvote if possible.