A monopoly from start to finish Essay Example for Free

A monopoly from lolly to finish EssayDuring out studies this term we have learned a lot nearly a Monopolistic way a social club is able to maneuver in the cable foodstuff and I would like to refresh your mind by offering a clear definition. A Monopoly is a positioning in which an entity, any an individual or an indus campaign or organization, is the sole supplier of a crabbed good or suffice. As such, this supplier has no competition from other suppliers and is able to control the market value of the commodity. Some monopolies be government-enforced or controlled, while others form naturally or through company merger.According to our focus of this paper, we are asking about the long-run belligerent equilibrium of the Wonks Company that was earning a normal rate of return and were competing in a monopolistically matched market structure. One of the questions we must settle regarding this change in business structure is how the companys shift to a monopoly will good the stakeholders involved. One of the stakeholders who may be involved is the government. Monopolies sancti unityd by the government are called legal monopolies.These are con emplacementred coercive monopolies, meaning that other companies are forbidden by law to compete against them. Governments also take note some control over monopolies through competition laws, which prevent monopolies from engaging in unscrupulous or anti-competitive practices (http//www. reference. com/motif/Society/advantages-disadvantages-of-monopolies). The second question is how a Monopoly will affect other businesses and after question it is quite obvious from the definition of a monopoly that other companies do not have to worry about competition from other companies in the same market.Consumers are affected by this change because they must either purchase the product or service from the monopoly or do without it. When a company transitions from a monopolistically competitive trusty to a monopoly, the re will be changes with regard to values and output from both of these market structures. So, lets take a closer look at how expenses are affected when a firm becomes a monopoly. A common practice among some monopolies is price discrimination, in which the monopolist charges some segments of the universe of discourse more(prenominal) than others for the same product or service, based on a higher need or a wealthier consumer base.This would usually be called price fixing which is an agreement between participants on the same side in a market to buy or sell a product, service, or commodity barely at a fixed price, or maintain the market conditions such that the price is maintained at a given level by controlling supply and demand. When the monopoly is able to prevent buyers from reselling their product, they may be able to price discriminate to accentuate the effects of monopoly power. In my opinion the most important chemical group that is affected by a Monopoly are the consume rs.Monopolies can impact consumer prices in two obviously diametric ways, they can cause prices to drop so low that it forces companies out of business or it an cause prices to uprise making it difficult for consumers to purchase a product, neither being a good option for the consumer. If one business is the only provider of a product or service, the consumer is forced to pay whatever the price they demand. This can also lead to the company providing a low type product or service without fear of losing business (Home, 2009).Since monopolies are the only provider, they can set pretty much any price they choose, regardless of demand, because they know the consumer has no choice. Is this way of thing fair to consumers? Of course not, barely it is how big business is able to stay on top of the market. For example, most people find that Apple products have an dread(a) price tag, but I have come to learn that the quality of their products is outstanding and I mind that Apple will c ontinue to rise in popularity for years to come.It has also come to my attention that because Monopolies try to monitor the price of products they may resort to price discrimination. set discrimination is some ages defined as the practice of a firm selling a homogeneous commodity at the same time to contrasting purchasers at different prices . Of course, I believe it is important to understand what and how price discrimination occurs. Price discrimination exists when two similar products which have the same marginal cost to produce are interchange by a firm at different prices.This sort of practice is highly controversial in terms of its impact on both consumers and rivals (Price Discrimination, 2006, p. 1). There are many ways to accomplish these sort of conditions because the transactions surely need not be simultaneous indeed, there is temporal discrimination, such as between Sunday rates and week, day rates, matinee and evening prices, peak rates and off-peak rates, season an d off-season prices. To sell different qualities or products with different marginal cost at the same price, or to buy different qualities or factors of different efficiency at the same price, is also discriminatory.Based on all of this useful data we must also answer the question regarding which market structure is more beneficial for Wonks to operate in and will this market structure benefit consumers? In my opinion it is based on the level of quality and service of the products and how much consumers are willing to pay for the products they want to purchase. In a monopolistic competitive market the consumer may choose to purchase a substitute product for a lower price, but only if the consumer values price over value.Of course with a monopoly there may be only a few companies offering a substitute product. If one companys product becomes in any case high in price, the consumer will eventually look for another brand that offers similar use. According to economist, the monopolist ic competitors demand curve is less elastic than a pure competitor and more elastic than a pure monopolist. Monopolistic competitors have excess capacity which means that fewer companies in operation(p) at capacity could supply the industry output.It is my opinion that Wonks might operate more beneficially as a Monopoly than at a Monopolistic Competitive firm because they will not have as much competition to deal with and they can corner the market with value and price.Resources 1. McChesney, F. S. , Shughart II, W. F. , Haddock, D. D. (2004). ON THE INTERNAL CONTRADICTIONS OF THE justness OF ONE PRICE. Economic Inquiry, 42(4), 706-716. doi10. 1093/ei/cbh091 2. Mainwaring, L. L. (1977). MONOPOLY POWER, INCOME DISTRIBUTION AND PRICE DETERMINATION.Kyklos, 30(4), 674. 3. https//www. fcsknowledgecenter. com/uploads/2011_Row_Crops_Industry_Perspective. pdf 4. http//academic. udayton. edu/lawrenceulrich/Stakeholder%20Theory. pdf 5. http//www. answers. com/topic/mergers-and-acquisitions 6. http//www. helium. com/items/1405663-what-is-a-monopoly-what-do-monopolies-do-how-is-the-economy-affected-by-monopolies 7. Case, K. E. , Fair, R. C. , and Oster, S. E. (2009) Principles of Microeconomics (9th ed). Upper Saddle River, New jersey Pearson Prentice Hall.