Monopoly Name Institution Date Table of Contents Table of Contents 2 Introduction 3 Body 3 Characteristics of Monopoly 3 Merits of monopoly 4 Demerits of Monopoly 6 Conclusion 8 References 9 Introduction Monopoly is the Greek term meaning alone or single. This term exists when a specific enterprise is the only sole provider of a particular commodity…
The company has unlimited market power even influencing how they charge higher prices. This may be confused with the ability to possess or own big businesses. Size is not all the characteristics of a monopoly in an enterprise, because a small business venture may also possess ability control market more than a big and existing companies. Body Characteristics of Monopoly An enterprise that enjoys monopoly exhibits a number of characteristics in the market or economy of operation. First, it maximizes profits. This is a value through the sales of the company’s services or goods to its consumers. For example in most of the third world countries and also in developing economies, most of the services or goods which have overall public consumption give way for the providing company to be a profit maximize (Lele, 2007). If it is only providing the electrical services for example, maximizing its profits is an easy feet to reach. This comes simply because there is or if any little competition from any other providing company. A company enjoying monopoly carries the tag of a price maker. Through this, the interpretation is that the company has the veto powers to decide and price goods or products, which it sells. For example, if the quantity is well in place for adequate market supply, the company therefore goes ahead and demands the price they desire as a firm (McKenzie& Lee, 2008). The characteristic of an institution enjoying monopoly is that one which creates high barriers to entry. This proposition aims at making sure that other sellers are unable to enter the market of the monopoly. For example, a company that may afford to offer promotional campaigns or motivating enticement to a publicly consumed good or service sets the standards of its customer preferences upon its competitors. In a situation where a communication company provides free minutes at a given point to its customer, a newly established competitor may find this a high level of barrier to counter given the minimal number of its customers in the same market. Being a single seller is yet another characteristic of a company enjoying monopoly in a given economy. A single seller dictates the supplies and influences the market trend with minimal interruptions (Kennedy, Waltzer & Atlantic City Historical Museum, 2004). This kind of the market brings out the existence of one seller of the good and it produces all the output. This means the whole market or region sings the tune or consumes the products of a single company. Finally, price discrimination is another characteristic that accompanies a company practicing monopoly. A monopolist does not need any outsider’s mind when choosing or changing the price of goods or service that it provides. For example, a company can sell more quantities at a relatively lower price than the competitors can even though there is minimal competition. The same case can apply when the company may decide to sell less quantities and charge high prices in a less elastic market. Merits of monopoly Certain monopolies exhibit various advantages for consumers, and social welfare. One of the advantages is that these companies are the investment in research and development. It is a common understanding that the monopolies make supernatural ...
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(“Monopoly Term Paper Example | Topics and Well Written Essays - 2000 words”, n.d.)
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(Monopoly Term Paper Example | Topics and Well Written Essays - 2000 Words)
“Monopoly Term Paper Example | Topics and Well Written Essays - 2000 Words”, n.d. https://studentshare.net/education/111478-monopoly.
In the next year a couple of lawyers bought all the firms and started operating as monopoly with the name “Wonks”. The price of the good is determined by the interaction between supply and demand. However the supply and demand is determined by the available technology and the market conditions.
On the other hand is monopoly in which the market is controlled by one single firm and there is no existence of competition and the market seems to be operational in an inefficient manner. The issue of what, when, for whom and where goods and services are going to be produced is decided by the forces of demand and supply in perfect competition and in monopoly, the decision is made by the single firm in the market.
In economics, market refers to a group of buyers and sellers who involve in the transaction of commodities and services.
Perfect competition refers to a market situation where there are infinite numbers of
Google emerged from these beginnings and has become far more than just a search engine. Google is a profit producing company that is a powerful force in the world of advertising, as well as other products and services. It has
eller in the market is known as the monopolist who is known to be the price maker enjoying complete control over the process of supplying commodities to the market (Armentano, 1978).
The case which is being concentrated in this research paper is of the potato chips company
nclude maintaining high prices for commodities or embracing economies of scale that allows a producer or seller to deal in large-scale production and services at an affordable price for consumers. This makes it difficult for small-scale producers or sellers to make it in the