Monopoly

Running Head : MONOPOLY[Writer s Name][Name of Institution] is such a model of exploit structure , where thither is only one firm or company which produces and supplies the whole food market with a sure harvest-feast . Therefore , in terms of monopoly , the holy market or perseverance consists of only one producer . Pure monopoly train hardly practically take place , but on that point argon examples which are very oddment to monopoly . In contingency , in many countries such services as inseparable gas water , telephone or new(prenominal) putting green services are governmental monopolies .McConnell and Brue , the authors of famous Economics , diagnose out the following characteristics of monopoly (1 ) a single seller (2 ) no close substitutes of the production (3 ) monopolist can govern the cost for the produ ct to a great extent (4 ) there are certain barriers to enter the market , like legal barriers (license , clear , etc ) or possessing special unique resources , and so on (5 ) non-price competitor , or producing standardized products (McConnell Brue , 2004 , 438-439Since a monopolistic company represents the entire industry , the curve of its demand is identical to the curve of The regularisation of maximation of the profits (MR MC ) is valid for monopolistic market . but , a monopolist does not try to minimise fair(a) cost and has a tendency to lower the amount of the goods produced in to keep the prices higher .
This brings to misallocation of the reso! urces , so the price in monopolistic market usually is higher than marginal costsPure monopoly is supposed to be not healthy for national economy beca phthisis it frequently ignores the rules of unaffectionate economic system (in contrast to pure disputation , because there is no stimulus for a monopolist to optimise the use of the resources , improve the quality of goods or lower the costs . That is why in to limit possible abuse of monopolistic king governments have to regulate and keep under control monopolistic markets by imposing some taxes or creating other legislative barriers for monopolistsReferencesMcConnell , C .R Brue S .L (2004 ) Economics : Principles , Problems , and Policies . 16 ed . N .Y : McGraw-HillPAGEPAGE 2...If you want to get a full essay, baffle it on our website: BestEssayCheap.com

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