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1. Until recently, knowledge, embodied in human resources and technology, always acting
in the center of economic development. Therefore, the knowledge economy (KTTT) is no stranger
to the economists. A new feature here is that more and production activities in the background
economic increasingly more dependent on the exploitation of the knowledge element, not out
exploring the tangible factors. 2. KTTT seems to go against the basic economic law of scarcity. If a seller go a TV, he would not own it anymore. But when a person sell an idea, it is still owned by that person and he can continue to sell it again and again. For no matter how many users knowledge matter knowledge can not be exhausted. 3. According to traditional economics, the economy based on the scarcity of resources. Most economic sectors, to a point, would fall into a state of "profits reach diminishing marginal ". So now no one can monopolize the market. 4. However, more and more goods comply with the law "marginal profit increased gradually. " To build a new software program could cost millions of dollars, but to copy the program into many copies it hardly cost a cent. The economic efficiency of scale thereby greatly increased lot. If the early 20th century, for a company with the scale doubles competition, the average unit costs of the company which will lower by 10% than the opponent. Today, if a software maker double sized rivals, the average unit cost of lower them by 50%. That makes the new carrier would be very difficult to penetrate the market. 5. Another complicating issue is that for many commodities (eg fax machines, computer software), their value increases with the number of users. If all acquaintances are using Microsoft Word, then let things become convenient than you would choose that software. It also creates the discomfort barrier penetration to school. 6. Another factor that helps a dominant firm to consolidate his throne on the school's "loyalty effect with product". Once clients have learned how to use a computer software they will hesitate to switch to another software by learning how to use also very annoying. Therefore, customers want to switch to use the new product, the product must have those advantages. 7. Many scholars argue that the current law on competition is no longer appropriate for the information economy. Specifically, they proposed that the government should show "permissive" than for the high-tech companies. With technology developing rapidly and the competitive landscape is increasingly fierce, exclusive only temporary. Moreover, proprietary demolition could damage the interests of consumers. A monopolies in the economy transmission maximize system profits by limiting supply and increasing prices. But in the background new economy, a monopoly firm will do the exact opposite. Therefore, the government is so "gentle" to the monopolies, allowing them to maximize economic efficiency scale. Technological innovation will force continuous lines always on high alert. If the operation inefficient, they will immediately be the stronger opponents supplanted.
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