NSS Exploring Economics 4 Chapter 19 Monopoly pricing Questions P.2 Think it over 1. Why does Microsoft not lower its price for Windows so that more people can use its software products? 2. The MTR charges students a lower fare. Do you know why? P.3 Discuss 19.1 Which private companies can be regarded as monopolists in Hong Kong? Do they charge higher prices? What do you mean by ‘higher prices’? Higher than what levels? P.7 Test yourself 19.1 Given the following information
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market structure is known as a monopoly. This is an easy enough concept to comprehend‚ but I went back and forth with a few classmates as to different examples of a monopoly. Technically‚ a monopoly is a business that basically has no competitors in its industry. They reduce output to drive up prices and increase profit. In doing so‚ they produce less than the socially optimal output level and produces at higher cost than competitive businesses. One example of a monopoly would be the existence of only
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Samsung that has driven it to the top. Smart Camera & Smart TV as a monopoly What is Monopoly? In Economic terms ‘Mono’ means ‘one’ and ‘Poly’ means ‘Seller’. So basically it occurs when there in only one seller of a particular commodity in a market. There is no close substitute for the product in the market so the seller has complete power to set its prices high as there is no competition. Usually monopoly companies try to exploit consumers by charging higher prices as consumers have
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when it fails it needs to be corrected. An example of market failure when government is needed is the peculiar case of the natural monopoly. This arises when a firm can supply the whole market with a good or service for less money than any combination of smaller firms. Government regulation is needed to prohibit the firm from restricting output and raising prices with no fear of competition. Local public utilities are examples of natural monopolies. Price fixing is an act that would be attempted
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strategies within market structures. Furthermore‚ this week has helped me in determining profit-maximizing strategies based on market structure analysis. Some of the most interesting things learned were the examples of monopolistically‚ oligopoly and monopoly. Keeping the concepts of Monopoly‚ oligopoly and perfect competition straight has proven to be a real challenge. The amount of information presented is overwhelming at times. I had to step back and reread several sections repeatedly to ensure
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SR. NO TOPIC PAGE NO. 1 OLIGOPOLY 3 2 PERFECT COMPETITION 5 3 MONOPOLY 7 4 MONOPOLISTIC 9 5 COMPARISON 11 Oligopoly An Oligopoly is an industry dominated by a few firms‚ e.g. supermarkets‚ petrol‚ car industry etc. The main features of oligopoly: An industry which is dominated by a few firms. Interdependence of firms‚ firms will be affected by how other firms set price and output. Barriers to entry‚ but less than monopoly. Differentiated products‚ advertising is often important Most
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Duopoly Its similar to the oligopoly but only two producers/sellers control the market. Monopoly A monopoly is a market structure in which there is only one producer/seller for a product. In other words‚ the single business is the industry. Entry into such a market is restricted due to high costs or other impediments‚ which may be economic‚ social or political. For instance‚ a government can create a monopoly over an industry that it wants to control‚ such as electricity. Another reason for the barriers
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1. Monopoly 2. Oligopoly 3. Monopolistic Competition 4. Perfect Competition A firm can be called a monopoly if they are the sole supplier to a market place or its market share is more than 25%. Monopolies are capable of influencing the whole market regarding influencing the price or deciding on the quantity that is supplied. They don`t have to worry about competition. They can set the price and let demand follow the price. They also work hard to prevent a rise in competition. Examples of worldwide
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decisions with varied pricing structures and supply levels due to the nature of the market where such goods and services are being sold. There are generally four market structures‚ namely; perfect competition‚ monopolistic competition‚ oligopoly and monopoly. The latter three structures are also considered as imperfect competition. The type of market structure can be described by the number of sellers or firms‚ the nature of product‚ entry and exit barriers‚ and degree of control over price‚ among
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If there are lot of barriers to entry there will be market structure such as monopoly or oligopoly; if there are no barriers to entry‚ or just few of them‚ there will be market structure such as perfect competition or monopolistic competition. When the barriers to entry are lots and strong‚ another producer will not be able to enter into the market because the costs and difficulties are too high‚ we will find a monopoly. In this type of market structure there are different kind of barriers to entry
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