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Both oligopolies and monopolies are affected by the increased production in the sense that higher production decreases the prices of products and services. The two market structures, unlike other market structures, are able to attain a monopoly on production in the specific goods or services under their copyright (Albano & Lizzeri 1997).
Monopolistic markets are solely controlled by a single seller only. The seller has absolute power to influence market decisions and prices. Consumers attain limited choices, and they have to make a choice from what is being supplied at the market. Conversely, oligopoly is characterized by few sellers in the market. The market situation is friendly to consumers since it encourages competition among the sellers (Spanjers 1994).
A monopolistic market gets its power from three sources: these include, legal, economic and deliberate. A monopolistic market will make into use the position it has to its advantage and completely drive out competitors. It can achieve this either through reducing prices to such levels that existence for another firm may become nearly impossible or through virtue of economic situations like large capital requirements when starting companies. Though an oligopolistic market situation does not have sources of power, it, however comes into existence merely due to the accommodating character of other sellers already in the market (Spanjers 1994).
A monopolistic market might quote very high prices because of nonexistence of other competitors. The monopolistic sellers will make use of their status of dominance in the market and maximize their profits. Oligopolistic markets, on the other hand, ensure competition in the market hence fairer prices for the consumers (Spanjers 1994).
These are regulations that are put into place to prevent entrance of firms into the market. Barriers to entry into
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The cost of one forklift is 2/6= .33 automobiles. The concave shape of the production possibilities curve shows the increasing opportunity costs. The shape of the curve depicts that the economy must give up larger units of rockets to gain added units of automobiles.
In the long run the price will first rise from P1 to P2 and then adjust itself due to entry of more firms to P3 which is lower despite the increment in the quantity of oil demanded; hence Nadler-Kafferlin will be right (Taylor et al, p 261).
c) According to Brill (2013), non-profit hospitals are actually high-end profit making institutions. This is because physicians’ bid to increase the income of medical staff has led to the non-profit hospitals increasing the prices
Then firm 2 chooses quantity given the choice of Firm 1.
Part b: Compare the output of the Stackelberg to the Cournot duopoly output. (* of course you will have know, or look up the Cournot model that we dealt with in the first
ws a firm to acquire its target profits by charging different prices to its consumers without their knowledge because of the reduced level of transparency (p. 565).
Loss-Leader Pricing Strategy: The strategy occurs whenever a firm imposes reduced prices on the goods of
a) Double marginalization Is the strategy that different firms within the same industry opt to apply their own price mark-ups so that they are able to respond to their differences in levels of supply. The different mark-ups
When imports in the country are cheaper, it helps in keeping inflation low, which is a goal for the majority of countries. Due to the small importation rates, it is easier for local industries to expand since
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