One mesoeconomic concept that was presented in the book was monopolistic competition. I chose this concept because it explains how businesses attempt to form possible monopolies and the potential influence it can have on the economy. "In September 1996, Office Depot and Staples, the two largest office superstores in the United States, announced an agreement to merge. Seven months after the merger was proposed, the FTC voted to oppose the merger onthe grounds that it would harm competition and lead to higher prices in the office superstore market. The FTC argued that the relevant market was the market for office supplies. The FTC made this distinction because the superstores carry a broad range of office supplies and maintain a huge inventory that let's consumers do one-stop shopping at these stores." (Farnham, 211) Simply put the Federal Trade Commission disapproved of this because they felt it would destroy small businesses (many that were already exterminated thanks to Home & Office Depot), and make Office Max, the only real competitor left obsolete. The rationale of the FTC was that both companies were inherently competitors and that a merger between the two would only lead to higher prices seeing how there would be no company to contest the proposed merger. The next concept is that of First-Degree Price Discrimination and consumer surplus. Consumers surplus is the concept that consumers typically do not have to spend the maximum amount they are willing to pay for a
between Monopolistic Competition and Monopoly market structures? To what extent do you agree with the view that Monopolies are ‘bad’ for the consumers?
Tutor Name : RecepYucedogru
Student ID : 133214
Date of Submission : 21/03/2012
Word Count : 1,000
- Definition of both monopolistic competition and monopoly.
- Examples for both definitions.
2. The main differences
- The main differences between monopolistic competition and
Cost of Monopolies to Society
The term monopoly refers to a business, frequently a large company, that is the only supplier of a good or service. Since monopolies are often the only provider of a service or product, they have the opportunity to make higher than normal profits. Unlike products and services offered in other market structures, most monopolistic products and services have limited or no substitutes. Like other providers, they are however still dependant on their customers. Monopolies…
Economics and the World
Principles of Microeconomics (Eco 204)
Instructor Steve McQueen
September 19, 2011
Even though it is in my belief that when we have all this competition that it will make everyone really think about what is best for them and the economy. And another thing is that if we really think about it we are trying our best to help other countries try to get on the same wave length and us but if we do all the work for them then they will depend on us all the time…
PLEASE COMMENT TO LET ME KNOW THAT THIS IS HELPING MY FELLOW PHOENIX.
1. A purely- or perfectly-competitive firm would be characterized by which of the following?
Hint : The different types of firms include pure competition, pure monopoly, monopolistic competition, and oligopoly.
A. Large number of firms, price taker, free entry and exit, and standardized product
B. Large number of firms, price maker, free entry and exit, and a differentiated product
C. Small number of…
structures: perfect competition, monopolistic competition, oligopoly, and pure monopoly. The author will first define and give an example of each market structure. The paper will go into detail about the characteristics of each, and how it fits in today’s economic climate. Next the research paper will evaluate each market structure’s pricing strategy. Finally the research paper will conclude with a case study on Wal-Mart’s market structure and how it fits into the monopolistic competition model.…
CH.8 what is market power? The ability of a firm to influence the prices of its products and develop other competitive strategies that enable it to ear large profits over longer periods of time.
What are the characterisitcs of the monopoly model? Price-setters, barriers to entry, economies of scale.
Compare price and quantity of a monopolist to a perfect competitor. Competitive firms are price-takers while monopolists are price-setters. Competitive firms will produce at lowest point on their average…
al., 2006 p. 10)”A ‘pure’ free market economy there would be no government intervention and decision as to the allocation of resources would be taken by individual producers and consumer through a system known as the price mechanism”.
The market economy is a dynamic environment, where the consumers’ choices can influence the producers’ decisions. The producers are motivated by financial results, and tend to follow the consumers’ trends. The market economy has the advantage to rapidly allocate…
and providing services such as washing, dry cleaning, restoration etc. to their clients.
Market demand and supply.
Demand and supply may be described as a fundamental in economics and act as a basic for the market economy in business. Demand shows how much of product people are willing to buy at specific price during certain period of time. There is connection between consumption and price. When price goes up demand goes down and this relationship is called law of…
performance is monitored
16) The situation in which one supplier thoroughly dominates a market and essentially shuts out other competitors is called monopoly.
Explanation: The situation in which one supplier thoroughly dominates a market and essentially shuts out other competitors is called monopoly.
AACSB: Application of knowledge
Chapter LO: 4
Course LO: Compare and contrast different economic…
negative variety create a problem in the functioning of the market to maximise the total utility of society where utility is defined as the aggregate sum of satisfaction or benefit an individual or society gains from consuming goods or services in an economy (Png, 2007)
In the diagram above the marginal social cost curve (MSC) is above the marginal private cost curve (MPC), this shows a negative externality. Reversely if the marginal social cost curve was below the marginal private cost curve…