Perfect Competition‚ Monopoly‚ Monopolistic Competition and Oligopoly Introduction Market can be defined as an area where buyers and sellers meet and come in contact with each other by any means of communication in order to get information‚ exchange of various goods and services and are interested to do business. From this definition we may be traced out following four essentials which market has: 1. The existence of good which is dealt with. 2. The existence of buyer and seller. 3. The existence
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1) Explain the terms ‘Monopoly’ and ‘Monopolistic Competition’ (4 marks) Monopoly A monopoly is a market structure in which a single company or individual owns all or nearly all of the market for a given type of product or service with no or close substitute. This would happen in the case that there is a barrier to entry into the industry that allows the single company to operate without competition (for example‚ vast economies of scale‚ barriers to entry‚ or governmental regulation)
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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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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 by large firms if there was no penalty
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MONOPOLISTIC COMPETITITION Marshall’s perfect competition was an illusion. Mrs. Robinson’s imperfect competition and monopoly were also away from reality. Pure monopoly is a myth. Seller can claim monopoly only and only if he has command over buyer’s choice. No seller can have such a control because buyers have an alternative to buying. Not buying. So long as that option exists‚ monopoly remains a myth. In mid 1930s‚ Prof. Chamberlin developed his theory of monopolistic competition. He pointed out
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Microsoft is the world’s frontrunner in software that supports and enhances the internet. Microsoft has become a monopoly‚ possessing market power in the market for operating system software and was accused and investigated for violating antitrust laws. In being a monopoly‚ they are one firm that maintains control of this system and creates a barrier for others to enter this market. They were investigated for antitrust actions‚ as they are accused of integrating Windows with Internet Explorer and
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mergers‚ monopolies and price fixing conspiracies (Bailey‚ 2010). The Clayton Act of 1914 was passed by the U.S Congress. It was an antitrust law that was amended to stop and prevent practices that led to unhealthy competition in the market. The Clayton Act was amended in order to complement an earlier version of the antitrust law referred to as the Sherman antitrust Act of 1980. This was a federal law that sought to prevent practices that were harmful to consumers such as cartels‚ monopolies and other
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Competition policy Lesson 1 Firms competing on market lot of game theory (strategic interaction between firms) It is also very close to industrial organization of firms Market Definition and market power. Microsoft case: it hold dominant position on operating systems (95% of non-apple computers) and the impact on internet browsers (Internet Explorer‚ Mozilla‚ …). Microsoft had a dominant position on the market‚ but need to define first the market. If narrow definition of the market
Free Competition law Monopoly Cartel
1. Characteristics of the four market structures. [monopoly‚ oligopoly‚ monopolistic competition‚ & perfect competition] 2. Know the four types of monopolies. [Government‚ Natural‚ Technology‚ and Geographic] Market Structure Vocabulary I. Perfect Competition – has a very large number of sellers (hundreds or thousands) of the same product (any agriculture or fishery product). They are all
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of firms that are competing in that market‚ along with factors such as: the ways in which these firms are alike or different‚ and the obstacles that exist in any new firms entering that market. In this report I will discuss Competitive Markets‚ Monopolies‚ and Oligopolies. I will point out what role each of the market structure play in the economy. This report will list the characteristics of each market structure. I will share how the price is determined in each market structure in terms of maximizing
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