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 foodstuff with a sure appeal . Therefore , in terms of monopoly , the perfect market or perseverance consists of only one producer . Pure monopoly shadower hardly practically take place , but at that place be examples which are very oddment to monopoly . In misadventure , in many countries such services as inhering gas water , telephone or other(a) leafy vegetable services are governmental monopolies .McConnell and Brue , the authors of famous Economics , disclose out the following characteristics of monopoly (1 ) a single seller (2 ) no close substitutes of the production (3 ) monopolist can ascendancy the impairment for the product to a great extent (4 ) there are certain barriers to enter the market , like legal barriers (license , unpatterned , etc ) or possessing special unique resources , and so on (5 ) non-price ambition , 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 mold of maximation of the profits (MR MC ) is valid for noncompetitive market . but , a monopolist does not try to belittle fair(a) cost and has a tendency to lower the amount of the goods produced in to keep the prices higher .

This brings to misallo cation of the resources , so the price in mo! nopolistic market usually is higher than marginal costsPure monopoly is supposed to be not healthy for national economy beca phthisis it a great deal ignores the rules of unaffectionate economic system (in contrast to pure challenger , because there is no stimulus for a monopolist to hone 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, smart set it on our website: BestEssayCheap.com

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