of market structures‚ Monopoly‚ Perfect Competition‚ Monopolistic Competition‚ and Oligopoly. They are differentiated by the number of firms in the industry‚ barriers to entry‚ pricing power of the firm‚ output decisions interdependence‚ and whether products are homogeneous (Colander‚ 2013). Monopoly A monopoly is a situation in which there is a single producer or seller of a product for which there are not close substitutes. The most common example of a natural monopoly would be an Electric (power)
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companies‚ so that they have the power control the market. Because tehre are very few competitors‚ they can charge their products or services more than the market value. It means that they can decide the price for their products and services. Some examples are electric market‚ water supply market‚ and fuel market in Vietnam. Because there is only one electric company and very few company in water supply market and fuel market‚ so that they can decide their price and charge a high price for their service
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|Perfect competition |Monopoly |Monopolistic competition |Oligopoly | |Example organization |General Mills-Green Giant |In south west Florida the power company |Charmin |Chevrolet | | | |FPL is a monopoly. |
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big topic. Vertical relationships: Ex. Producer-retailer. Lot of anti-competitive practices (price squeeze: high prices for resources that are essential input to produce a good) Merger control Why do we examine mergers‚ what are economic examples. Ex. Online platforms: Euronex (meeting of buyers and sellers) Objectives of competition policy Still emerging debate on competition policy: should it be a protection of players? We are in liberal economy‚ so all players should be able to
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Privatization‚ also spelled privatisation‚ may have several meanings. Primarily‚ it is the process of transferring ownership of a business‚ enterprise‚ agency‚ public service or public property from the public sector (a government) to the private sector‚ either to a business that operate for a profit or to a non-profit organization. It may also mean government outsourcing of services or functions to private firms‚ e.g. revenue collection‚ law enforcement‚ and prison management.[1] Privatization
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most important personal objective * Growth objective * Profit maximization * Model * Economic profit ≠ accounting profit Market structures * Perfect competition * Monopolistic competition * Oligopoly * Monopoly Perfect competition * Many (small) suppliers and buyers: ‘price takes’ * Demand function for individual company * Products are perfect substitutes * Free entry and exit * Information is perfect (available to all no
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and a non-collusive oligopoly. [15 marks] Collusive Oligopoly • formal (cartel) or informal agreement (tacit collusion) among producers to limit competition between themselves • they act as if they were a monopoly • discussion of the consequences of the firms acting as a monopoly • impact on consumers • members may compete against each other using non-price competition • regulations to prevent collusion Non-Collusive Oligopoly • no agreement exists between producers • existence of
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oligopoly is a market structure where there are a few dominant firms whose behavior is interdependent. There are a few dominant firms relative to market size‚ and they each command a large proportion of the market share‚ thus having strong monopoly power. Examples of petrol companies include Shell‚ Caltex and Exxon Mobil. Their demand curve is downward sloping‚ meaning that they are price setters. Petrol is a homogeneous product‚ hence the oligopoly is known to be pure or perfect. Theoretically
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they otherwise would. Where competition is fierce‚ managers do not have that option. There is a rough congruence between this inequality of fit and the varying strengths of shareholder primacy norms around the world. In Continental Europe‚ for example‚ shareholder primacy norms have been weaker than in the United States. Historically‚ Europe’s fragmented national product markets were less competitive than those in the United States‚ thereby yielding a fit between their greater skepticism of
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dominated by a small number of sellers. An oligopoly has the ability to determine its own price and output. (McConnell 164) Industrial regulation is used to reduce the market power of monopolies. It’s also used to reduce the market power of oligopolies‚ prevent collusion and increase market competition. A pure monopoly is a market structure in which only one
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