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Seinfeld Economics: The Soup Nazi
by Linda Ghent `

Monopoly power is the ability of a firm to alter the market price of the good or service it sells.

Barriers to entry are conditions or circumstances that make it very difficult or unacceptably costly for outside firms to enter a particular market to compete with the established firm or firms that are already selling the good or service involved.

 

This Commentary is related to the following Clips:
Seinfeld: The Soup Nazi by Larry David & Jerry Seinfeld (1995) The Soup Nazi makes delicious soup—so good there's always a line outside his shop. He refuses service to Elaine, and by a stroke of luck she comes across his stash of soup recipes. She visits his shop and informs him that his soup monopoly is broken, while waving his recipes in his face. Also in this clip, George gets charged $2 for a roll that everyone else gets for free. This example of price discrimination shows that in order to charge different customers different prices, you must have market power.