In lecture, we discussed how firms with market power can manipulate price menus to extract a larger share of total surplus. The economic models we saw assumed that the Government designs the legal framework scaffolding the "free" economy and that firms, perhaps reluctantly, operate within that framework.

In his article "Towards a Political Theory of the Firm" Luigi Zingales, the Robert C. McCormack Distinguished Service Professor of Entrepreneurship and Finance at the University of Chicago Booth School of Business, has a somewhat different view of what it means for a firm to have market power and how firms with market power shape the economy. Read the article and answer the questions below.

a) According to Professor Zingales, how is firms' power changing in the United States?

b) What is evidence of these changes?

c) Why are these changes taking place?

Then, discuss one of the following two prompts:

d) Do you think the United States could ever become a "banana republic"?

e) Where do you think your country of origin is positioned in the taxonomy Zingales presents at the end of the paper? Why?