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Efficiency of the market - Essay Example

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Efficiency of market is hugely critical factor for addressing the market anomalies and optimizing the performance outcome within a competitive market. Market efficiency primarily refers to the best allocation of resources to meet the changing demands of the people at competitive…
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Efficiency of the market

Download file to see previous pages... At the same time, perfect indiscriminate price monopoly not only leads to the optimal benefit to the firm but also maximizes market efficiency.
In monopolistic market, single-priced monopoly adversely impacts the market mainly because it does not reflect the real human cost of producing goods which result in market anomalies and inefficient market. But when perfect indiscriminate price monopoly is applied on goods, the market response is more positive. Different price strategy in segmented market helps the firm to sell all the goods that are produced. In imperfect indiscriminate pricing, inefficient allocation of resources adversely influences the market efficiency and consequently, both the firm and the consumer become losers. Moreover, perfect indiscriminate price monopoly also encourages innovative inputs and highly creative ideas that facilitate production of goods which can provide the firms with competitive advantage vis-à-vis market monopoly. Patents law, intellectual rights and copyrights are prime examples of government aided monopoly that promotes creative inputs and widens the scope of market driven goals and ...Download file to see next pagesRead More
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