range of products and services that are related to computing through its various product divisions. Microsoft is an example of a well-known monopolistic power. A monopoly exists when a specific person or enterprise is the only supplier of a particular commodity. There is a direct relationship between the proportion of people using a product and the demand for that product. A monopoly can play a crucial role in the development or acquisition of market power. Over the years‚ Microsoft began to dominate
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same stage of production and also in the same industry. This process is also known as a "buy out" or "take-over". The goal of Horizontal integration is to consolidate like companies and monopolize an industry. A monopoly created through horizontal integration is called a horizontal monopoly. A term that is closely related with horizontal integration is horizontal expansion. This is the expansion of a firm within an industry in which it is already active for the purpose of increasing its share of the
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This assignment has a maximum total of 100 marks and is worth 10% of your total grade for this course. You should complete it after completing your course work for Units 6 through 10. Answer each question clearly and concisely. 1. Suppose that a firm has fixed costs of $25 per day for renting one machine and its variable costs are as shown in the table below. Labour Output VC TC AFC AVC ATC MC 0 0 $ 0 25 ---- ---- ---- ---- 1 4 25 50 6.25 6.25 12.50 25 2 10 50 75 2.50 5.00 7.50 25 3 13 75 100
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supply – Control of market price – The high market share and power means that the dominant firm has control of the market price instead of the market as a whole. Monopolies – A monopoly is an economic market condition where one seller dominates the entire market. A monopoly occurs if a firm has 25% of the market shares. A natural monopoly can happen when it is most efficient for production e.g. Post office Oligopoly – An oligopoly is an economic market condition where numerous sellers have their
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should take over the firm(s) at the successive retail stage. Explain the circumstances under which such a takeover raises the profits of the monopoly producer. Also‚ discuss why vertical integration might not increase the profits of the producer. It is commonly believed that vertical integration is an attempt to create monopoly and to seek rents. Monopoly theories of vertical integration explain it as the instrument of price discrimination and the creation of entry barriers. Alternatively economic
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contrary‚ government deregulation is the vice versa of government regulation. Relating government regulation with microeconomics‚ the main purpose of regulating the economy is to protect the consumers and employees’ rights. Using the U.S. as the main example‚ government intervention is principally practiced in order to safeguard employees’ civil rights and protecting the environment. In addition‚ government regulation is enforced to clasp corporations accountable by limiting the amount of power used in
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Key for Homework 5 Question For a monopolist to sell more units of output‚ Answer the price must be increased. the price must be reduced. demand must become more elastic. the other competing firms must sell fewer units. Question In a monopoly‚ the market demand curve is Answer the same as the demand curve facing the firm. the summation of all the individual firm s demand curves. nonexistent. the marginal cost curve above minimum average variable cost. Question A monopolist maximizes
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CHAPTER 9 Three conditions for a market to be perfectly competitive? Many buyers and sellers‚ with all firms selling identical products‚ and no barriers to new firms entering the market. In perfectly competitive markets‚ prices are determined by The interaction of market demand and supply because firms and consumers are price takers. Price taker Buyer or seller that is unable to affect the market price. A buyer or seller that takes the market price as given When are firms likely to be
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At point C there are clear gains (at least as much of one good and more of the other). If we knew preferences‚ we could compare A and B (prices give us such info). Because C is inefficient‚ it does not mean any point on PPC is preferred to C (example is D). [Figure 1] * Wealth is increased via innovation‚ specialization‚ and markets (markets allow specialization and exchange). [Figures 2‚3] Chapter Two: Supply and Demand * Quantity demanded is inversely related to price (p). We get the
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Monopoly: in media economics‚ an organizational structure that occurs when a single firm dominates production and distribution in a particular industry‚ either nationally or locally Oligopoly: in media economics‚ an organizational structure in which a few firms control most of an industry’s production and distribution resources Limited Competition: in media economics‚ a market with many producers and sellers but only a few differentiable products within a particular category; sometimes called
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