Many aspects of industrial organization analysis is controversial. At bottom, the debate turns on ideological value judgments as to the proper role of government. Free and unfettered markets fail, and how seriously they fail is a matter of dispute. We will attempt to provide a balanced assessment in this course.
In its mainstream, industrial organization is concerned with how productive activities are brought into harmony with the demand for goods and services through some organization mechanism such as free market, and how variations and imperfections in the organizing mechanism affect the succes achieved in satisfying an economy's wants. Primary emphasis will be placed on the manufacturing and mineral extraction sectors of industrialized economies, with secondary emphasis on wholesale and retail distribution, services, transportation and the public utilities sectors. For a variety of reasons, markets may fail, then the government agencies may choose to intervene and attempt to improve performance by applying policy measures. Costs, investments, prices and outputs can be influenced by taxes and subsidies.