Monopoly And Monopolistic Competitive Market - 947 Words

The study of Microeconomics tells us of the different market structures the economy is made of. For the purpose of this paper, we will take an in depth look at three of these such market structures. Monopoly and Monopolistic competitive market along with Oligopoly. We will look at how and why these markets exist in conjunction with the advantages to the producer and the disadvantages to the consumer. As we research Monopoly in detail, compare the monopolistic competitive market and Oligopoly, we will also discuss the Gas market in relation to these types of markets. To begin to understand monopolies, we have researched several things. Why do they exist? What do they do, in response to the economy? Although, we don’t see many monopolies now due to antitrust laws to prevent monopolies from forming, there are natural monopolies. There are several reasons why monopolies exist. These are known as barriers to entry. Scarce resources with one producer can limit the number o f other firms joining the market as competition. Increasing returns to scale prevents smaller firms from entering an industry because as output rises average total cost falls. This in turn enables these producers to grow and tolerate the monopoly. This is now where a natural monopoly is formed. A single producer of an industry has a large cost advantage over other smaller firms, if they existed in the industry. A natural monopoly includes local water, gas and electricity providers. TheseShow MoreRelatedIntroduction to the Potato Chip Industry1397 Words   |  6 Pageseach producing and selling their own products within a monopolistic competitive structure. In other words, the products created and sold were slightly different, so that they were not perfect substitutes for each other. The economic agents as such competed on different segments and were able to implement the prices they saw fit, without creating or sensing influences from the other players in the market. Today however, the structure of the market has changed dramatically, after two lawyers purchasedRead MorePure Monopoly in a Competitive World Essay996 Words   |  4 Pagesthe perfectly competitive firm is considered the price taker, whereas the monopolistic firm is the price maker, meaning they have control over the price. Pure monopoly does exist in today’s business world; we all have had the opportunity to have personal dealings with such companies. This assignment will discuss the various degrees of â€Å"monopolies† and attempt to provide accurate examples, allowing me to share my understanding of the competitive business market. 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This essay will evaluate the differences between market structures and will also identify a group of competitive strategies consistent with the market structure that best aligns with the market in which the organization competes. A dditionally, assessing the market structure positively and negatively affects the organization s ability to earn an economic profitRead MoreMonopolies And The Telecommunications Industry1590 Words   |  7 Pages Monopolies and the Telecommunications Industry A monopoly that is owned, controlled and managed by the government allows maximum benefits to a consumer even much more that a competitive firm may be able to provide. This is because the government may not harbor any intent to earn profit. As a result, it would provide a good even when there is no profit at a very low price so that the good remains available to the consumer. One such example is telecommunications industry, which is a necessity sinceRead MoreEssay on Four Market Structures in Australia865 Words   |  4 PagesIndividual Essay Four Market Structures in Australia. NAME: LKHAGVASUREN KHURELBAATAR ID: EMV 20110 ------------------------------------------------- Individual Essay Four Market Structures in Australia. Introduction Market structure reflects all the most important aspects of the market - the number of firms in the industry, the type of product produced, the possibility to enter and exit of firms, number of customers, the ability of a single firm to influence the market price. The lower