INTRODUCTION Oligopolists maximize their total profits by forming a cartel and acting like a monopolist. Yet‚ if oligopolists make decisions about production levels individually‚ the result is a greater quantity and a lower price than under the monopoly outcome. The larger the number of firms in the oligopoly‚ the closer the quantity and price will be to the levels that would prevail under competition. The prisoners’ dilemma shows that self-interest can prevent people from maintaining cooperation
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categories which are ‘monopoly‚ oligopoly‚ monopolistic competition and perfect competition’. There are some major features that separate these types of markets. A monopoly is a structure in which a single supplier produces and sells a given product. (E.g. IGDAS‚ ISKI‚ OPEC) If there is a single seller in a certain industry and there are not any close substitutes for the product. Under monopoly there is no rival or competitors. Basically there are four features of monopoly. First one is strong barriers
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Market Structures and Relating Pricing Strategies Abstract This paper analysis’s the four categories of the market structure; perfect competition; monopolistic competition‚ oligopoly and monopoly marketing structures. It will also provide pricing strategies as they are specifically related to each market structure. Each market structure possesses it own unique pricing structure that every business follows to achieve its maximum profit. Some market structures pricing strategies
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CHAPTER 10: PURE MONOPOLY Pure monopoly – single firm is the sole producer of a product for which there are no close substitutes; characteristics: * Single seller – sole producer or sole supplier; firm and industry are synonymous * No close substitutes – consumer who chooses not to buy the monopolized product must live without it * Price maker – pure monopolist controls the total quantity supplied‚ so has considerable control over the price; changes product price by changing quantity
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structures • Changes in costs and revenues in different market structures The range of market structures |Type |Perfect competition |Imperfect competition |Oligopoly |Monopoly | |Example |Financial markets and |Small service sectors‚ |Supermarket chains‚ banking|Microsoft? | | |commodities |bars‚ restaurants |
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likely to arrive at the conclusion that under monopoly the industry will produce a lower output at a higher price as compared to perfect competition. This will result in a loss of technical/productive and allocative efficiency. Good candidates might also comment on the loss of consumer welfare and sovereignty. The candidate who‚ in addition‚ comments on the possibility of economies of scale under monopoly would obviously score very highly. Monopoly * only one seller the firm is the industry
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Industrial regulation pertains to the government regulation of firms’ prices or rates within industries. These regulations are in existence to prevent companies from forming a monopoly‚ to promote competition and achieve fairness. In the mid 1800s‚ as industry grew‚ many industries began to take on the look of a monopoly; using questionable business tactics and charging their customers high prices. The customers and businesses that patronized these industries began to complain to the government
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that matter any country’s economy. Any commodity has a chain of transportation and distribution that delivers to their customers. There are various markets in which a freight transportation company operates. These include perfect competition‚ monopoly‚ monopolistic competition‚ and oligopoly. For each of these markets we are able to identify and interpret cost and revenue curves. In the “Differentiating between Market Structures” simulation we were able to see all of these factors; as well as
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operate under a monopoly which gives them an edge or a corner on the market. In this discussion we will focus on the differences between a monopoly‚ oligopoly‚ and a cartel. We will also look at what game theory is and its affect on monopolies and cartels and the welfare affect of each of the above mentioned. A monopoly is defined as‚ "sole control of a particular line of goods or services in a given market or the means to control distribution and price."(Webster ’s‚ 2000) In a monopoly situation there
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industry) behave in terms of pricing‚ supply‚ entry & exit‚ competition and efficiency. Currently‚ there are four types of market structures practiced in the world. These are: 1. Perfect Competition 2. Imperfect or Monopolistic Competition 3. Monopoly 4. Oligopoly These market structures are as a result of the different degrees of competition within the industry. Each structure is differentiated by freedom of entry and exit‚ number of buyers and sellers‚ product differentiation‚ etc. However
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