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Legal barriers restrict competition through methods such as patents or copyrights, public franchise and government licenses (Duffy 119).
Price discrimination and a single price markets are the two main price strategies utilized in monopolies. For most monopolies, low prices facilitate larger output; therefore, single price strategy is efficient in determining output and price. Single price monopoly involves selling its entire output unit at similar prices to all customers. This strategy builds on the flux in demand for goods. In an elastic environment, single price monopoly works best by increasing the production of a unit and reducing the selling price thereby, increasing marginal revenue that translates to profits. However, in a rigid demand market setting, fall of price in the output translates to decrease in total revenue. In such markets, monopolies reduce the number of units produced and increase the price of each unit. This will decrease the total cost but increase the income profits (Duffy 120).
In a perfect competition market, equilibrium occurs when the demand is equal to supply in regard to unit quantity and price. On the other hand, equilibrium in a single price monopoly markets occurs when the marginal revenue and the marginal cost are equal. Monopoly equilibrium relies on a higher price smaller output strategy. Perfect market competition is more efficient than a monopoly market because the marginal social benefits and the marginal social costs are equal. This equilibrium describes the maximization of consumer surplus and producer surplus hence production of efficient output. Firms that run a monopoly are not able to get maximum outputs from the available inputs. In summary, marginal social benefit exceeds marginal social cost leading to dead weight loss. However, this discrepancy can be averted through rent seeking which is the process of redirecting the surplus from a
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The gold prices hit the lowest figure in 1980s. Since then the world economy has passed through several stages of crisis including inflation, debt crisis, housing market crisis, financial recession, etc. The weaker performance of the economic index led to rising demand for gold and the prices of gold increased.
The target area has old buildings which must be demolished for clearing and leveling of the land in preparation of the new construction to begin. The approval for planning from the Basingstoke Town authorities for the development of the three storey commercial block has been granted and the development shall spare a parking space adjacent to the building.
A comment on a website surveying for a solution to this problem appeared as, "In many countries (but especially Britain) the entire philosophy concerning public transport is flawed. First, it should be more convenient and, second, it should be cheaper, than the alternative single-person, single-car option.
Explain yours answers. (3 marks)
The shopping center in offering "free" parking considered that the benefits exceeded the costs by providing such facilities to its shoppers. It means more business, more sales, and more
It is vital that parking lots be a convenient place to park; if they aren’t, people will be angry. It is a fact that many cases of road rage get started in parking lots. The current parking lot at this university has many problems; problems that must be addressed