QUESTIONS RELEVANT TO MONOPOLY: 1-What is the attribute of the monopoly? 1 , The existence of an individual product of the commodity 2 , seen as a prices, growing prices current 3 , the relative stability of prices 4 , There are obstacles to enter the industry monopolist 5 , not necessary to market Another Monopoly properties. Selling price control. Within a monopoly, and at the expense of supply on the market one entity to control and demand, and the degree of the cost offered plus the control practiced by the institution or person is better.
Predatory prices. This characteristic of the advantages of a monopoly consumers.
They are short term market gains when prices decreased to meet the necessity of rare product. Suppliers and customers directly benefit from an attempt to monopolize the corporation to increase someone buy of business marketing. Selling price flexibility To find the demand pertaining to the product or service offered by the company monopoly or individual, and is determined by the cost elasticity in the ratio in the absolute worth of the increase in prices and demand available in the market. Lack of creative imagination At the expenditure of absolute control of industry, and monopolies display a tendency to lose effectiveness over a period of time.
With a single product lifetime, and innovative design and marketing tactics rear seat. Lack of competition. When the marketplace was designed to provide the monopoly and the lack of commercial competition or the insufficient goods and viable items shrinking the scope of “perfect competition. ” 2-How monopoly arises Monopoly occurs in a variety of conditions: there are types of goods and a service would not accept by simply its character, or not really in the open public interest to multiple producers, it’s referred to as natural monopolies, for example: to provide the city with water, electricity, or the train locomotives running among two countries.
Often suppose the state or municipal authorities to manage these services, or grant a concession into a private organization, subject to stringent control. Monopoly may come up in an market, the growth of a project, and it grabbed on various other projects. Or perhaps as a result of pick up or combine of tiny projects inside the large-scale job, Monopoly Might arise because of agreement between your projects owners in a particular industry to determine the price, or divide marketplaces among themselves, known as (cartel), and in this case there are a number of producers, this kind of agreement among them makes them a monopoly electric power.
Most of the countries have been working away at the subject of monopolies control. 3-How we can regulate the monopoly Pricing for marginal cost Economists include for many decades argued the advantages of setting public utility charges on the basis of limited cost. This kind of view is usually expressed in several classic financial texts on regulation. Selling price discrimination One common objection to marginal-cost pricing is that, in the presence of financial systems of size, a simple linear price corresponding to marginal cost would not llow the controlled firm to recover sufficient income to cover its total costs. Ramsey costs In those cases in which the regulator is unable to set the marginal cost for each services equal to the marginal price, economic theory still areas central emphasis on reducing the deadweight reduction. Incremental expense The deadweight-loss hypothesis provides a hard time explaining why government bodies fail to go after policies which can be efficient within the conventional economical theory, just like Ramsey prices. Price / service stableness
Another dilemna for the standard economic way of regulation is definitely the heavy focus on price stability. There is a considerable amount of evidence that price and service stableness is one of the primary concerns of regulators. Option regulation ¢ To motivate the fruitful efficiency of the monopolist. ¢ To eliminate the motivation to squander resources aiming to obtain a location of monopoly. ¢ To protect the sunk investment in the monopolist 4-Give some examples of monopoly sort of monopolyThe key characteristicexamples
NaturalAccess to exceptional and not very easily reproducible elements of productionMonopolies with the world of creation is calcium deposits of strategic importance intended for the nationwide economy technologicalFeature production: in this technology is not enough buyer demand to compliment many competitive firmsEnterprise intended for the production of specific items, such as facilities for the operation of natural monopolies GeographicCompetition due to the non-rationality from the territorial limited due to the a result of geographic barriersPublic ransport corporations infrastructureInfrastructure network , a network that offer products among distant by each other (both in space and in time), economic agentsBackbone enterprises in energy, train transport, heat, gas and water supply patentUsing a unique trademarked technologyNatural monopolies are creating high-tech products, such as treatments StateMarkets linked to the exclusive jurisdiction from the stateDefense, airline administrative commandOperating in a command word systemNatural monopolies in the administrative-command system