Reference no: EM133078137

"In [Adam] Smith's time, markets were largely local or at most national in scope, except in key commodities that were traded internationally (e.g. sugar, slaves or spices) or a limited range of manufactured goods (e.g. silk, cotton and woollen clothes). These markets were served by numerous small-scale firms, resulting in the state that economists these days call perfect competition, in which no single seller can influence the price. For people from Smith's time, it would have been impossible even to imagine companies hiring over twice the then size of London's population (0.8 million in 1800) operating in territories that outnumber the then British colonial territories (around twenty) by a factor of six (McDonald's operates in over 120 countries)." (Ha-Joon Chang, Economics: The User's Guide, p.38)

Using examples, discuss how today's markets and firms are different from the ones in the 1800s.