• Home
  • Subjects
  • Marketing
  • What are the main differences between Monoploy and Monopolistic Competition market structure?

What are the main differences between Monoploy and Monopolistic Competition market structure? - Essay Example

Extract of sample
What are the main differences between Monoploy and Monopolistic Competition market structure?

A monopoly is a market situation where only one seller exists, producing a product which has no close substitutes. It is at the complete opposite end of the spectrum to perfect competition. In practice a monopoly situation can arise when a firm has a dominant position in the market in terms of its market share. For example, British Telecom enjoyed a monopoly until 1988 when the UK office of telecommunication decided to end it. The basis for a monopoly market is the existence of barriers to entry. These are factors that prevent new firms from entering the industry, or even if they do, will force them to close. Barriers can be of various forms.The high fixed cost or setup cost can be the toughest obstacle to tackle. The barrier here is access to capital. Only large firm will be able to fund the necessary investment. An established monopoly is likely to have developed specialized production and marketing skills. It is more likely to be aware of the most efficient techniques and the cheapest suppliers. In most cases, such firms have a major cost advantage because of economies of scale which allows them to operate on a lower cost curve. Advertising and brand names with a high degree of consumer loyalty may also prove a difficult barrier to overcome.The firm’s monopoly position may also be protected by patents and other legal protection such as various forms of licensing or tariffs, which may hinder entrance of local and foreign firms. Aggressive tactics and intimidation may also act as a barrier ...
Download paper

Summary

A monopoly is a market situation where only one seller exists, producing a product which has no close substitutes.It is at the complete opposite end of the spectrum to perfect competition.In practice a monopoly situation can arise when a firm has a dominant position in the market in terms of its market share…
Author : cankunding
Download 1

Related Essays

Why was it is necessary to replace GATT 1947? what are the main differences between GATT 1947 and the WTO? Do you think that the
. 5 Interim Commission for the International Trade Organisation (1947-1994).5 Review Session (1950s). 6 European Economic Community (EEC) (1957). 6 Multifibre Arrangements (MFA-I through MFA-IV). 6 The Uruguay Round (1993-1994). 8 Multilateral Investment Agreement (MIA) (1996). 9 U.S. Corporate Average Fuel Economy . 9 Dispute Settlement Body (DSB).10 WTO’s Articles III and IV.10 Converting GATT 1947 to WTO Introduction The GATT was formed by states with a decisive idea of the co-operation that was required to promote economic development and modernisation. Even though the idea required an...
11 pages (2761 words) Essay
Market Structure
What is also significant to understand that the article discusses how the services are packaged together with the goods to deliver a unique combination of offering to the consumers? This combination of selling the services and goods as the bundled products are changing the way traditionally goods and services are being offered. This article discusses also the strategies of the leading players in the market and how the competition between them is shaping the future of the industry. This paper will discuss the market structure described in the article, how the externalities, environmental...
5 pages (1255 words) Essay
Market structure
The Spangles candy was a fruity boiled sweet with a slight fix about it, the packaging letters were big fat bottomed font, and they came in several flavors. These candies were popular enough that they made their way into pop culture through songs, and cultural references. “They were launched a few years ago, but didn't seem to take off. The wording on the packaging was in that big fat-bottomed font, the same one that The Goodies used on their opening titles.” (BBC h2g2, 2011) Available market segments include, persons who were born 5 years prior to the initial release of these candies...
4 pages (1004 words) Essay
The main dangers of using mergers or acquisitions as a form of market entry
Mergers or acquisitions may be defined as an aspect of corporate finance or strategy and management that involves buying, selling and combination of various companies.The objective of combining is to finance or assist a company that is growing to grow fast without forming another business entity. The two terms have a slight difference, on one hand, acquisition may refer to a company taking over another and establishing itself as a new owner. On the other hand, merger occurs when two companies agree to operate as one new company. As suggested by Turner and Johnson (2010), in both cases, that is...
5 pages (1255 words) Essay
The differences between National Income and Gross National Happiness
Gross Domestic Product is a measure of the level of income yielded by an economy over a stipulated period – generally this time period varies between one quarter and a complete year depending upon the end period when data is published by the authoritative body. It is actually an estimation of the size of the market underlying the economy on the basis of goods and services sold in it through the specific time span. The size of GDP earned by an economy could thus be encompassed by means of the following identity – GDP ? Consumption + Investment + Government Expenditures + (Gross Exports –...
5 pages (1255 words) Essay
Differences in Negotiation Style between Brazil and United States
Leveraging bond is a vital factor in Brazilian negotiation. Brazilians often employ distributive and eventuality bargaining. They anticipate long-term commitments from their business partners and focus mostly on long–term benefits. They are very competitive with regard to negotiation and at times become very aggressive. Even when a personal bond is strong Brazilian people at times become unenthusiastic to share information frankly. They believe right information can create bargaining advantages and sometimes provide irrelevant information repeatedly. Brazilian residents anticipate...
5 pages (1255 words) Essay
Differences between IFRS and AAIOFI standards
The development of the international accounting standards and its acceptance would help in reducing the compliance costs and in the process would develop consistency in the quality of the audit. (IFRS in your pocket 2005, p. 2) What are IFRS standards? The International Financial Reporting Standards (IFRS) have been enforced by International Accounting Standards Committee for the better understanding by the equity investors, the lenders and anyone else who uses the information. The world securities regulators have been recommended by the International Organization of Securities Commission to...
9 pages (2259 words) Term Paper
Got a tricky question? Receive an answer from students like you! Try us!