Monopoly market and Monopolistic Competitive market and number: Date submitted: The economics topic centers on the relationship of human activities and wealth. The research scrutinizes the monopoly market…
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Each potato chip market type has its own benefits and peculiarities. Monopoly A monopoly, including the Wonks monopoly, occurs if there are no competitors. There is only one seller of a certain product type or brand in the community. Likewise, monopoly occurs when there is only one product that serves a specific need or want. Monopoly crops up when new entrants are prohibited or cannot topple the obstacles to entering a market occupied by only one seller. For example, the school allows only the school’s own bookstore to sell the students’ required textbooks. The community’s only electric power company is a monopoly. States normally admit only one tap water entity to supply the community’s water needs (King, 2011, p. 355). Under a monopoly, there are significant hindrances to entrants to the monopoly market, especially with the potato chip industry monopoly. For example, legal barriers prevent competitors from entering the monopoly market. For example, the government only allows one company the license to operate within the community, city, or state. Some states offer a monopoly license to one company to serve the water, sewer, natural gas, and electric power needs of the constituents. In other states, the government operates monopoly liquor stores and lotteries. Likewise, the United States Postal Services has a monopoly license to deliver first class mail. ...
The government can ensure more accurate collection of taxes. The government has to monitor only one company supplying the water, electricity, gas, mail, and other needs of the community. The government’s tax collection efforts will be easier. The businesses have to transact with only one company in a specific market segments. The business entity has to only contact one water supply company, one mail delivery agency, or one electricity provider, for their water, mail, and electricity needs. The consumers can easily locate the only entity responsible for the supply of water, electricity, and mail services. The stakeholders will have lesser time and difficulty finding and transacting with the monopoly company serving the needs and wants of the community. Pricing under the monopoly differs from the monopolized competitive market. The monopoly company can raise its selling prices without losing its current customer base. The customers have no other alternative but to pay the higher prices. The government can step in and set limits to the monopoly company’s price increases. The government can interfere when the monopoly company’s price increases borders on abuse of the customers. Government interference is required when the price increase does not equate to the improvement of the company’s current unfavorable service (Dudey, 1996). In terms of production, the monopoly enjoys exclusive rights to sell its products and services to the current and prospective customers. Microsoft is the exclusive seller of Microsoft computer software products (Gisser, 2001, p. 211). Microsoft is the sole seller of Windows XP, Windows Vista, and Windows NT software. The company’s monopoly of the Microsoft office software forces all computer users to buy
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The group of companies prior to the merger was individual competitors in a market dealing with the same products. However, after being bought by two lawyers, the environment is bound to change as the competitive market changes in structure. The preceding scenario is an example of an imperfect competitive market referred to as monopolistic competition.
On the other extreme is the monopoly, a single firm in the whole industry hence there is no competition (Sloman 2007). Theoretically a perfect competition is possible but practically a perfectly competitive market does not exist. Properties of a perfectly competitive market include: 1 Consumers believe the products are homogenous 2 Firms are free to entry or exit the market 3 Buyers and sellers have perfect knowledge (buyers know the price charged by sellers and sellers know about the number of buyers in the market) 4 Minimal transaction costs- the expense of finding a buyer, in case of a seller, or vice versa for a buyer and making a trade transaction are almost negligible (Perloff 2003).
As it is shown in the essay, monopoly is a market structure where there is a single producer or seller of the product in the market with no substitutes available. The paper focuses on uncovering of the relative inefficiencies of the monopoly market, compared with other structures. This market produces less output with higher prices.
The author states that one of the key points covered in the article include the objections against a monopoly as understood by the economists. The argument against monopoly is that in the absence of competition, monopolies can charge whatever they want and the charged prices are usually higher than the prices under perfect competition.
Under free trade environment the market itself fixes the price whereas in the Monopoly structure the monopolist being the only supplier fixes the price at which goods or services will be provided. In the monopolist market structure there are no close substitutes to the product or service the monopolist deals with and there are different barriers to enter the market.
In three years time the patent on the “Neutron” expires and another competitor enters the market making the market an Oligopoly. After a few years, since Quaser faces Monopolistic competition, it has to change its pricing and marketing strategies as there are more competitors and less possibilities of controlling the price
In addition, this paper will tell Oligopoly theory gives us a rather confused picture of the relationship between economic profits and market structure" Has empirical investigation of this relationship helped us to clarify the picture? Why might it be argued that it takes only a few rivals competing in the same market to achieve an outcome very close to that of large numbers 'perfect' competition? Does it make much difference if the rivals can cooperate with one another?
It means that an imperfect firm has a control over the market price. This control varies from industry to industry.
Monopoly is the extreme condition of imperfect competition. It is just the opposite of Perfect competition. In a Monopoly, there is a
As defined previously, in a perfectly competitive market, there are an infinite number of sellers selling the same product (Salsman). This means that none of the sellers have power to dictate the prices for the good. If a seller
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