> One of my students came to me with a puzzle. In his community, garbage
> collection is a fairly competitive industry. New residents are given a
> flyer listing 15 different collection companies. They generally charge
> about $15/month for one collection per week.
> Why are there so many collection companies? It would seem like there
> would be economies of scale.
> Andrew Sellgren
Is there no product differentiation? Some firms could offer more frequent
pickups, separate recyclable pickups, different day of the week, different
methods of billing, better responses to complaints, allow for different
size cans, etc. Monopolistic competition could then persist. What does
the flyer say?
Fred Foldvary
