Market Structures Unemployment

Cloud 9 vs. Sturgis & Sons

Glenn’s family used to own a local hardware store before Cloud 9 entered the market and put them out of business. Cloud 9 was probably able to take advantage of economies of scale and a large distribution network to offer competing products at lower prices. Monopolistic competition in the long run results in zero profits for firms, but if a small company already has relatively little profit before entry, a decrease in demand could result in that particular firm incurring losses and leaving the market. Because Sturgis and Sons specialized in hardware, some of those workers may be structurally unemployed if their skills are no longer needed in the local market. Later in the episode, Glenn finally shares his frustration with Cloud 9 and how they killed his family’s business because of their devotion to profit maximization.