2.2 Economy of North America………………………………………... 7
The topic covers opportunities for allocation of capital as a scare resource that has to be allocated in many ways. Others see prospects in monopolistic environment, while others perceived the pure and natural monopoly more advantageous for their particular intention.
Economies of countries differ because of economies of scale. This results to differences in GDP of poor and rich countries. We also see that aggregate demand is affected by price levels that either lowers or raises income and eventually influences balance of trade. Also, we have come at a conclusion that capital is the backbone of any business, but there are several decisions needed before a business could be established.
Economics is a social science that studies production, distribution and consumption of goods and services. By extension economics also studies economic system, human welfare the creation and distribution of wealth, and the scarcity and alternative uses of resource. Under this definition, this study looks at the different market structure in a monopoly environment, examines the economy of selected countries, and studies the capital structure of business in order to understand the process of distribution of wealth.
A monopolistic competition is a form of an imperfect competition which results from the differentiation of products by sellers. Dean, J. (p. 51) describes monopolistic competition as a situation where there are many sellers and no one can claim of control of major part of the common commodity. For example, McDonalds cannot claim a monopoly of hamburger sandwich as many others are selling the same product. McDonald differentiates its product thru advertising and promotion. Chart below shows a monopolistic competition which shows that on a short run basis, profit margin is comfortable for