"Monopoly power is not automatically bad as long as it is regulated". Discuss this view [20marks] Monopoly power occurs when a business is a dominant seller of a good or service with a market share that exceeds 25%. There are many disadvantages for societies where monopolies exist. A higher price than those in competitive markets is one of the main disadvantages for society. As monopolies are the main seller of goods and services in the market they can use their market power in order to raise
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’How Does a Free Market Prevent a Monopoly? ’ We often listen to this statement that there are no monopolies in a free market or a free market prevents monopolies. Though there are some arguments about if the statement is completely true and‚ if a government plays a part in making or preventing a monopoly. To understand and to validate the statement first we need to understand few terms used in the statement and concepts of market. Types of market economies There are majorly four types of
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new development‚ etc. of drugs. Include appropriate graphs showing the difference between monopoly pricing and competitive pricing. The drug industry currently takes on both monopolistic and competitive market structures. When a drug company develops a new drug‚ there are patent laws that allow the company to have a monopoly on selling the drug. In the short-run‚ the company is able to charge the monopoly price (above marginal cost) and maximize profit by producing the quantity where marginal
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Why is it important for the government to regulate natural monopolies? A natural monopoly arises where the largest supplier in an industry‚ often the first supplier in a market‚ has an overwhelming cost advantage over other actual and potential competitors. This tends to be the case in industries where capital costs predominate‚ creating economies of scale that are large in relation to the size of the market‚ and hence high barriers to entry; examples include public utilities such as water services
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Name: Lê Đức Anh Class: 12B Subject: Economic Question 3: Discuss whether monopolies always lead to an increase to inefficiency? Monopolies‚ in economist mind they are bad‚ however‚ not all things that monopolies do are bad‚ and they also bring benefits along side the negative effect. First‚ monopolies have an advantage of research and development. Monopolies can achieve supernormal profit‚ as they can set high price to a certain product‚ this can be used to fund high cost capital investment
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This essay will look at efficiency between both a monopoly and a perfect competition‚ and whether a monopoly is necessarily less efficient than perfect competition. Using diagrams and equations reflecting the optimal choice of output‚ marginal revenue and marginal cost for monopolies‚ I will explain how efficiency is affected by low levels of production. At the same time monopolies can increase efficiency due to their ability in price discrimination‚ they price people differently and therefore
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Activity 2 BSAD 1050 1. In a free market‚ greed prevents monopoly. Explain. A free market prevents a monopoly because it does not allow someone or‚ some company‚ to corner the market. There is always someone else that is willing to make or sell a product for the same or lesser price. For instance‚ in a free market there is not just one phone or cable company providing television or phone service. Other companies are allowed by law to provide those same services. Since the goal of the
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Is Monopolies Harmful and How Can Regulation Ameliorate These Harmful Effects? Why is monopoly harmful? How can regulation ameliorate these harmful effects? What problems confront the regulators? In order to deduce that a monopoly is harmful’‚ there must be another market system which is preferable to monopoly so as to offer greater benefits to the public. A monopoly can therefore be compared to perfect competition. If the benefits of perfect competition outweigh the benefits of monopoly then
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of marine life (industries)‚ different swells (market structure) and even ’hot’ and ’cold’ spots (public companies). One of the key determinates to a successful national economy is the structure of its markets. The main market structures are: 1. Monopoly 2. Oligopoly 3. Perfect Competition 4. Monopolistic Competition Each of these market structures have unique characteristics‚ and can be classified according to three factors. The degree of competition‚ the first factor‚ is important as it classifies
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Astro Malaysia Holdings Berhad had used Facebook as one of the marketing and promotional strategy. It had been used to update the latest information of the company‚ new promotion‚ and description of the movie or drama that will show on. Prior of 15 October 2012‚ they had launched numerous promotional and marketing strategies for example adding new channel‚ roadshow and Free HD upgrade plus two months free Broadband and Astro Super Pack rebates. On October 2012‚ Astro posted that it will add KBS
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