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

Inappropriate levels of competition amongst both buyers and sellers - Essay Example

Cite this document
Summary
Causes of monopoly include; natural monopoly where a company controls the raw materials, legal monopoly where the government issues patents or copyright to owners of ideas. There is also statutory monopoly given to utility service providers. There are monopolies due to…
Download full paper File format: .doc, available for editing
GRAB THE BEST PAPER95.8% of users find it useful
Inappropriate levels of competition amongst both buyers and sellers
Read Text Preview

Extract of sample "Inappropriate levels of competition amongst both buyers and sellers"

Inappropriate levels of competition amongst both buyers and sellers Competition is the act of firms trying to do better than others in the market through various activities in the sale of goods and services.Competitiveness is the ability of a business to fight for market share, make profit, and increase volume of sales, among other competitors (Dwivedi, 2002). 2. There is pure competition, imperfect competition, monopoly, and oligopoly.Firms improve their competitiveness through various actions, for example, changing production methods to reduce cost, changing strategies, or even increased marketing (Dwivedi, 2002).3.Competition improves performance and innovation among firms, therefore, improved quality in products and services. 4.Competition and Markets Authority.

Yes, because CMA regulates both international and local markets (CMA, 2014). 5.These are descriptions of the concept of monopoly that are important in the formulation of policies. They are important because they guide policy formulation in various areas.6.Causes of monopoly include; natural monopoly where a company controls the raw materials, legal monopoly where the government issues patents or copyright to owners of ideas. There is also statutory monopoly given to utility service providers.

There are monopolies due to international trade restrictions, too much capital needed to start up a business, and monopoly due to mergers and large scale production. There are all sources of barrier to entry into a business (Dwivedi, 2002).7.Monopoly power is preferable when dealing with utility service provision. An example is the provision of water of electricity to citizens. This would be beneficial because the government will regulate the prices and production and ensure quality services at low costs.

Monopoly power is also preferable in situations where innovation develop new situations (creative destruction), for example, the extinction of CDs to development of downloadable music from the internet (Dwivedi, 2002). 8.Contestability is a measure of a markets capability to allow new entrants. For contestability to occur, there must be potential entrants who evaluate profitability based on the current firm’s prices, there must be at least one rival with the same cost structure, and entry and exit should be free.

Limits of contestability are; reduced profits, sunk costs and barriers to entry. Benefits of contestability include; increased incentives which enable firms to take action on consumer preferences, and cut costs, and lower costs (Piazza, 2011).ReferencesCompetition and Markets Authority. Retrieved from:https://www.gov.uk/government/organisations/competition-and-markets-authorityCowen, T. (2009). Creative Destruction: How Globalization Is Changing the Worlds Cultures. Oxfordshire: Princeton University Press.

Dwivedi, D. N. (2002). Microeconomics: Theory And Applications. New Delhi: Pearson Education India.Piazza, R. (2011). Leadership Contestability, Monopolistic Rents and Growth. International Monetary Fund.

Read More
Cite this document
  • APA
  • MLA
  • CHICAGO
(“Inappropriate levels of competition amongst both buyers and sellers Essay”, n.d.)
Inappropriate levels of competition amongst both buyers and sellers Essay. Retrieved from https://studentshare.org/macro-microeconomics/1647794-inappropriate-levels-of-competition-amongst-both-buyers-and-sellers
(Inappropriate Levels of Competition Amongst Both Buyers and Sellers Essay)
Inappropriate Levels of Competition Amongst Both Buyers and Sellers Essay. https://studentshare.org/macro-microeconomics/1647794-inappropriate-levels-of-competition-amongst-both-buyers-and-sellers.
“Inappropriate Levels of Competition Amongst Both Buyers and Sellers Essay”, n.d. https://studentshare.org/macro-microeconomics/1647794-inappropriate-levels-of-competition-amongst-both-buyers-and-sellers.
  • Cited: 0 times

CHECK THESE SAMPLES OF Inappropriate levels of competition amongst both buyers and sellers

Improvement of the Refund Policy of EBay

This is because it offers an unprecedented platform for the liaising of the services of both buyers and sellers.... People can easily register as sellers and make their products available online.... However, due to the fact that most of these sellers are not adequately enlightened about the use of the Internet and other elements of commercial contracts, there are numerous cases of dissatisfaction of consumers.... This paper enables the researcher to critique the system of sales and legal framework for sellers and buyers on eBay....
13 Pages (3250 words) Essay

Oligopoly as the Ideal Market Structure

A more prevalent form of market situation is one in which there is a small number of buyers or sellers, each of whom handles a large share of the total supply and therefore has certain attributes of monopoly and monopoly power.... Individual firms may decide to try their strength and to enlarge their share in the market by active competition....
12 Pages (3000 words) Essay

Magnum Ice cream Launch in the US Market

This discussion stresses that Magnum Ice Cream, the first ice-cream brand that had targeted adult consumers has thought of expanding its market to United States.... Magnum ice-cream enjoys one of the most dominant market positions in the European market.... nbsp;… As the paper declares the company now wishes to enter the U....
9 Pages (2250 words) Essay

To what degree does trust affect the competition in E-commerce

The idea of this research emerged from the author's interest and fascination in what degree does trust affect the competition in E-commerce with Taobao as an example.... From the discussion, it is clear that trust influences to a great extent the competitive ability of an e-commerce website....
12 Pages (3000 words) Essay

Inappropriate Levels of Competition Amongst both Buyers and Sellers

A monopoly is where there is only one seller in the Economic Environment Inappropriate levels of competition amongst both buyers and sellers as a cause of market failure Inappropriate levels of competition refer to the situation where the market has not attained an optimal position in term of supply and demand.... A monopoly is where there is only one seller in the market and sets high prices than the prices at which the buyers are willing to buy at leading to the restriction of supply quantity and a reduction in the demand of the consumers for the product due to the high prices (Varoufakis, 1998)....
1 Pages (250 words) Coursework

The Competition Law in the European Union

For example, some are producers, retailers, and whole sellers while However, the scope of economics is only restricted to defining the types of businesses and individuals involved in this kind operations but has no authority to detect and prevent the functioning of cartel (a price setter illegal group)1, which work at the cost of healthy competition in the market besides working to benefit a few members at the cost of consumers.... And for this purpose, the role and application of both articles are of crucial significance for determining type and level of damages paid by the injured party and in order to provide compensation, the legal proceedings will ascertain remedy for providing equitable compensation to the injured party....
7 Pages (1750 words) Essay

Strategic Growth Plan for Market Dojo

As they negotiate the price of the good or the serviced decrease such that by the time are done the price is favorable to the buyers who will be willing to choose the price that fits them.... Market Dojo offers both reverse auction and forward auction.... The last process that is implemented is based on the company; it should be done in a straightforward and transparent way that favors both the supplier and the buyer (Cogswell, 2004)....
11 Pages (2750 words) Case Study

Sales Strategies and Corporate Objectives, Recruitment and Selection, and Remuneration

The author examines sales strategies and corporate objectives, recruitment and selection, motivation in sales performance, techniques used to co-ordinate and control sales output, budgetary control, cost control, organisation structure and procedures, and sales representative.... nbsp;… Opening letters of credit, insurance special packaging, etc....
9 Pages (2250 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.
Contact Us