Monopoly

Running Head : MONOPOLY[Writer s Name][Name of Institution] is such a model of grocery store structure , where thither is only one firm or company which produces and supplies the whole market with a sure prayer . Therefore , in terms of monopoly , the immaculate market or perseverance consists of only one producer . Pure monopoly merchantman hardly practically take place , but in that location ar examples which are very oddment to monopoly . In chance , in many countries such services as intrinsic gas water , telephone or otherwise green services are governmental monopolies .McConnell and Brue , the authors of famous Economics , tonality out the following characteristics of monopoly (1 ) a single seller (2 ) no close substitutes of the production (3 ) monopolist can rule the bell for the product to a great ext ent (4 ) there are certain barriers to enter the market , like legal barriers (license , overt , etc ) or possessing special unique resources , and so on (5 ) non-price contestation , 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 tackle of maximation of the profits (MR MC ) is valid for monopolistic market . but , a monopolist does not try to denigrate 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 resources , so the pric! e in monopolistic 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 competition , 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, put up it on our website: BestEssayCheap.com

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