Contact Us
Sign In / Sign Up for FREE
Go to advanced search...

Monopolistic Competition versus Monopoly - Essay Example

Comments (0) Cite this document
Running Head: Monopolistic Competition versus Monopoly Monopolistic Competition versus Monopoly and number:    Date Introduction Wonk, a company in the Northwest, has bought up constituents of the potato chip market and has conglomerated them into one unit…
Download full paper File format: .doc, available for editing
GRAB THE BEST PAPER95.7% of users find it useful
Monopolistic Competition versus Monopoly
Read Text Preview

Extract of sample "Monopolistic Competition versus Monopoly"

Download file to see previous pages Monopolistic competition is comprised of a group of producers with identical products. The competition between the producers is not determined by the prices of the goods they supply but rather by how differentiated their products are (Salvatore, 2006, p.238). In this kind of competition the producers that are involved take the price that the rival producer is charging and use it on his own product not considering the consequences of the price. The scenario is different in a monopoly. Here, a single firm is the sole supplier of a given product as is the case when Wonks bought up the individual competitors and joined them to make up a single firm. The main characteristic of a monopoly is that the producer has a higher market share than that which is expected within a perfect competition. Another characteristic of the monopoly set up is the lack of substitute products in the market denying the consumers a choice. In this paper, we are going to analyze the consequences of a monopolistic competition being transformed into a monopoly. The hypothesis developed is; analyzing the effect that transforming a group of companies in a monopolistic competition into a monopoly will have on consumers, government and the company. Discussion In order to better understand the transformation, a closer look at the characteristics of both a monopolistic competition and a monopoly is required. In so doing, one can then draw parallels and differences that arise. In a monopolistically competitive market, a firm acts as a monopoly does in the short run, however in the long run, the market resembles a perfect competition since there is entry by more competitors and the gains accrued by having highly differentiated products diminish as does the possibility of the producers gaining economic profits. Consumers are very aware about the qualities of the products that the rivals offer since the differences are not evidenced by price. This model therefore is characterized by well informed customers and the producers rely on brand uniqueness to trigger a brand loyalty in consumers. In this model, there is no barrier to entry or exit. The model can thus be attractive to a large number of producers with identical products as there are no rules against entry. Likewise, there are no rules that may hinder a producer exiting the market when it is no longer attractive. Lastly, producers exercise a certain degree of control over the prices they charge. Although the control they have is limited, a producer can decide to price his products differently from the market price. The government can usually intervene in a monopoly in order to accomplish a determined goal or simply to cushion the consumers against extortion. Otherwise, when a monopoly is not coerced to perform in a certain way, the most typical goal is to maximize profits. The producer accomplishes this by producing few goods and charging them at a high price. The producer is thus a price maker in contrast to one in a monopolistic competition Monopolies often have barriers to entry where other sellers find it extremely hard to enter the market (Burkett, 2006, p. 155). This may be due to the structure adopted by the monopoly that discourages competition or may be sanctioned by the government. The major characteristic of a monopoly, however, is the fact that only a single producer is present in the given market. Here, it is assumed that ...Download file to see next pages Read More
Cite this document
  • APA
  • MLA
(“Monopolistic Competition versus Monopoly Essay Example | Topics and Well Written Essays - 1500 words”, n.d.)
Retrieved from
(Monopolistic Competition Versus Monopoly Essay Example | Topics and Well Written Essays - 1500 Words)
“Monopolistic Competition Versus Monopoly Essay Example | Topics and Well Written Essays - 1500 Words”, n.d.
  • Cited: 0 times
Comments (0)
Click to create a comment or rate a document

CHECK THESE SAMPLES OF Monopolistic Competition versus Monopoly

Cultural History Versus Political History: The Varying Methods of the Two Fathers of History

Even though they have these similarities and have both been bestowed with the same title, these two historians drastically differed in their approaches.

Herodotus had another title bestowed upon him; he was also called the “Father of Lies.” Much of what is known of him has been gathered from his own writings as few other sources are available from his actual life. It should also be noted that the veracity of this information is in question as Herodotus was known to invent much in his own work, and it was sometimes the practice in Ancient Greece to attribute events from the life of one person to another; for instance, it has been questioned if the accounts of Herodotus’ exile are only due to the fact th...
10 Pages (2500 words) Essay

Project Risk Assessment: Qualitative Versus Quantitative Approach

The risks may vary in terms of nature or scope according to the situation. So since the risk is so common in project management, a very important aspect of managing a project is analyzing all the possible risks that are associated with that particular project. It makes no sense of going on with a project and not giving a thought to the risks that could affect the success. Once these risks are analyzed, the project manager will have all the possible risks in front of him. He will know the degree of risk and also the benefits that the organization will get if the risk is taken. Therefore only after a risk analysis, the project manager is in a position to conclude whether or not it is worth taking the risk and going on with a certain...
6 Pages (1500 words) Assignment

International Law: The Case of Kawakita versus the United States

...International Law There is no legal ambiguity in the Saudi Arabian government’s assertion that the United s has no right to prosecute persons involved in an incident that occurred in Saudi Arabia. All International jurisdiction laws enforce the sovereign rights of states to try and prosecute criminal offences occurring in that state. Saudi Arabian Defense Minister’s argument that “any legal steps in the case fall within the jurisdiction of Saudi Arabia” do not infringe any international law. Various UN charters and The World Court, International Court of Justice (ICJ) have laid down clear guidelines with regard to international criminal jurisdiction. ICJ has ruled that “in the absence of a specific permissive rule to the contrary...
7 Pages (1750 words) Case Study

Modernization of European Court Competition Law

...Modernisation of EC Competition Law The following work will evaluate the effect of Regulation 2003 on the applicability of Articles 81 and 82 EC. Furthermore, the role of lawyers in the current EU régime will be assessed, specifically the disadvantages experienced by in – house lawyers. On account of the abolition of the notice requirement, considerable time and resources are saved. However, this requires self – assessment by undertakings, which could sometimes be in breach of competition rules. The consequence could be liability for breach of competition rules at a later date, and this is a drawback in the new procedures for the market participants. Regulation 1/2003 abolished the exemption monopoly of the Commission. It established...
8 Pages (2000 words) Assignment

The Significance of Public Law: R. Jackson versus Attorney General

...The Significance on Public Law: R (Jackson) v Attorney General [2005] “The principle of parliamentary sovereignty means…that Parliament has under English constitution, the right to make or unmake any law whatever, and, further that no person or body is recognized by the law of England as having a right to override or set aside the legislation of Parliament.”1 A.V. Dicey (1885) Parliamentary Sovereignty is accepted as a rule of law by the judiciary, as their dedication to uphold it within the court system remains stable and visible. A.V. Dicey (1885) represents a legal-theoretical standpoint by which he believed that parliamentary sovereignty was the key that unlocked the very composition by which the legislation passed... Significanc...
7 Pages (1750 words) Case Study

Home School versus Public school

The popularity of homeschooling had escalated over the last decade. According to the “National Home Education Research Institute” (NHERI), a staggering 1.5 million people in America are home-schooled ever since it was first legalized during the 1900s. (Moitozo, 7)

A child would not lack social skills nor would the child be afraid to associate themselves with others. Homeschooling does not mean a child would be contained in a house and isolated from the world. As a matter of fact, every child needs to be educated physically, such as participating in sports. The parents would provide a form of physical education by enrolling the student in a basketball team or even a dance studio. During this time, the student wo...
6 Pages (1500 words) Assignment

Perfect Competition and Food Industry

A perfectly competitive market is characterized by certain features which makes it quite distinct in making competitive analyses of a firm or industry. Firstly, it must be taken into account that a perfectly competitive market is characterized by a large number of buyers and suppliers. Moreover, the firms present in a competitive market are found to produce identical products, which act as substitutes from the consumer’s point of view.  The consumers have an added advantage in a competitive market scenario in getting ready information about the prices of the products that each firm produces which helps them to decide on the purchase. In regards to the accessibility to resources the firms in a competitive market scenario...
6 Pages (1500 words) Case Study

Operational Arts Napoleon versus Stonewall Jackson

...Operational Arts Napoleon Versus Stonewall Jackson TOPIC: What impact did Napoleon have on the art and science of war, and in particular on the notion of operational art? How does Napoleon compare and contrast to Stonewall Jackson? Table of Contents Operational Arts 1 Napoleon Versus Stonewall Jackson 1 Table of Contents 2 Introduction 3 Napoleon’s Influence on War Strategies 3 Operational Arts 4 Napoleonic Impact on Operational Arts 5 Stonewall Jackson 6 Napoleon versus Stonewall Jackson 6 Conclusion 7 Bibliography 9 Introduction In the words of Halleck, “War in its most extensive sense may be regarded both as a science and an art. It is a science so far as it investigates general principles and institutes an analysis of military...
6 Pages (1500 words) Term Paper

The Aspects of Monopoly

On the other hand, pure competition is characterized by a large number of small competitors. The small competitors normally have no market control thus it only acts as an ideal market structure that sets standards for good results in the future.
A firm that is under pure competition may sell as much as it wishes with the current market price as long as it can produce at its original cost. However, the firm may achieve monopoly status due to economies of scale, government decree and resource ownership (Tucker 228).
The emergence of a monopolistic firm is normally influenced by economies of scale and decreased average cost. When a firm finds itself in a monopoly position, its average cost has to reduce overtime thus sellin...
7 Pages (1750 words) Term Paper

Films versus Cinematic Representations of Mental Illness

...Films versus Cinematic Representations of Mental Illness It can be extremely amazing the discussions that can emanate from the movie and film casts. It is very rare hearing discussions about the depictions of movies and their significance to various aspects of social life and the realities of life such as mental illness among other issues and conditions humans may be undergoing or battling with in their lives. Some of these debates can be very delicate thus explaining why they are often not in the limelight as subjects of discourse in the social circles. However, as much as these issues may not be in the limelight as subjects of discussion, in some quarters are perturbed people on the depictions of these movies of the conditions they have...
10 Pages (2500 words) Assignment
sponsored ads
We use cookies to create the best experience for you. Keep on browsing if you are OK with that, or find out how to manage cookies.

Let us find you another Essay on topic Monopolistic Competition versus Monopoly for FREE!

Contact Us