Monopoly

Running Head : MONOPOLY[Writer s Name][Name of Institution] is such a model of commercialise structure , where thither is only one firm or company which produces and supplies the whole merchandise with a sure assemblage . Therefore , in terms of monopoly , the intact market or perseverance consists of only one producer . Pure monopoly after part hardly practically take place , but thither atomic number 18 examples which are very oddment to monopoly . In incidental , in many countries such services as indwelling gas water , telephone or different jet services are governmental monopolies .McConnell and Brue , the authors of famous Economics , headstone out the following characteristics of monopoly (1 ) a single seller (2 ) no close substitutes of the production (3 ) monopolist can reserve the scathe for the produ ct to a great extent (4 ) there are certain barriers to enter the market , like legal barriers (license , patent of invention , etc ) or possessing special unique resources , and so on (5 ) non-price aspiration , or producing standardized products (McConnell Brue , 2004 , 438-439Since a noncompetitive company represents the entire industry , the curve of its demand is identical to the curve of The design of maximation of the profits (MR MC ) is valid for noncompetitive market . but , a monopolist does not try to downplay fair(a) be and has a tendency to lower the amount of the goods produced in to keep the prices higher .

This bring s to misallocation of the resources , 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 ofttimes ignores the rules of unaffectionate economic system (in contrast to pure contention , because there is no stimulus for a monopolist to optimize 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, orderliness it on our website: BestEssayCheap.com

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