Short Paper: EU Competition Policy Economic principles underlying EU competition policy Effective competition between suppliers is important in the way that it allows to reduce prices‚ improve the quality of goods‚ and enlarge the quantity of items provided for the consumers due to the process of innovation. The European Commission’s purpose is to ensure fair competition in European markets. It promotes economic efficiency‚ an optimal allocation of resources
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perfectly competitive or as a pure monopoly. The vast majority of firms do compete with other firms‚ often quite aggressively‚ and yet they are not price takers: they do have some degree of market power. Most markets‚ therefore‚ lie between the two extremes of monopoly and perfect competition as seen in in the below picture namely‚ monopolistic competition and oligopoly. Perfectly Competitive Monopolistic competition Oligopoly Pure Monopoly Fig. 1 Cases under study
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Home work questions Define the following 1. Costs in economics are those things that must be given up in order to have something else. 2. Revenues are the income earned from a firm’s sale of its good or service to consumers in the product market. 3. Profit is the difference between a firm’s total revenues and its total costs. 4. Explicit costs are the monetary payments that firms make to the owners of land‚ labor‚ and capital in the resource market. (i.e. rent‚ wages and interest respectively)
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become large and a lot of companies can supply the goods. There will be no monopoly market and to maintain the profit‚ firm should reduce the quantity with the same price. But the present value of profit will decrease because total of revenue decrease and automatically reduce the shareholder wealth maximization. This would decrease the value of firm because the entry of new foreign competitors means there will be no monopoly market and the firm will have competitors thus reduce it shareholder wealth
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Perfect competition- Is it possible? To claim that something is "perfect" is to say that it cannot be done better. In business and economy it is very common to think that the best possible allocation of society’s resources occurs when "perfect competition" characterizes the organization of industry. It is a well worked out theory that has been around for over a century. The concept of competition is used in two ways in economics: competition as a process is a rivalry among firms; competition
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A business-level cooperative strategy is a strategy used by firms who collaboratively work together to achieve a shared objective that is focused on creating value to the customer; growth and performance improvement; gain a competitive advantage and earn above average returns by competing in one or more product markets (Hitt‚ Ireland & Hoskisson‚ 2013). This is accomplished through a strategic alliance where firms share‚ exchange and combine resources and capabilities to generate a competitive
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Econ2TEST4 Multiple Choice Identify the choice that best completes the statement or answers the question. ____ 1. Five months ago Wilson opened up a health club. Which of the following is an implicit cost related to the health club? a. Wilson paid $120 for an outside laundry service to clean the towels used at the club. b. Wilson paid $100 for the pest control exterminator to spray the health club. c. Wilson previously worked as an accountant‚ earning $3‚000 a month. d. Wilson usually eats four
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of output should the firm produce to maximize profits? 4 3. How does the demand curve faced by a monopoly differ from the demand curve faced by a perfectly competitive firm? Explain. In a perfectly competitive firm‚ the price is set and fixed. This means that the demand curve is a horizontal straight line. On the other hand‚ the demand curve for a monopoly is the demand curve itself since the monopolist is the only player in the market and can set the price at any level
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Therefore possible but unlikely way of creating a lock-in. First mover dominance: Create chocolate with Stevia‚ Green Tea‚ etc.: Capture health trend and the demand for low-carb chocolate (Morris JA‚ 2014) Be the first- to launch and create a monopoly in this domain (Chance to patent this to preserve advantage as it is likely that competitors work on the same trend) Insistence on preservation of position Does not exist for the chocolate industry since neither Lindt Germany nor any other competitor
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games that can be played with just an ordinary deck of cards. Board games come in second place of popularity with the typical family home. Monopoly‚ chess‚ checkers‚ Clue‚ and newer games like 404: Law not found‚ and Smorgasbord are only but a few of the board games sizzling in the market. What family do you know that does not have a monopoly sitting around the house somewhere? From being placed in a drawer or neatly hidden inside of a closet. Smorgasbord is a board game for friends‚ family
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