Essay on success which is no monopoly of brilliants
Answers
Monopoly is only one seller to produce the products that no close alternatives. Therefore, it is the monopolistic structure of the market. The single seller will be the form of self-employed or joint-stock company or the partnership. The single company usually we called as monopoly and it is the price setters and can control the commodity market supply. However, this does not mean that he can set prices and production levels. The few things that he can do are either output or price but not both at a same time. Monopoly is a big company and it is the sole supplier of a commodity or service. This one seller has no competition to compete with so that he can control the price of the good or service. If there is no competition, the prices of products sold with any other products should have a near-zero cross elasticity. Monopolies are usually bad for an economy because they limit free trade and allow the market to set prices randomly.
1.1 Characteristics of monopoly
The monopoly is a single seller of a good for no readily available alternatives. It should have high barriers to entry and other companies cannot easily enter the market to provide the goods. Monopolies tend to produce legal obstacles. Patent law granted to the inventor the exclusive production and sales of the product in a period of time. Licensing restrictions will often limit who can provide the goods or services in a particular geographic region. Monopoly is a large number of firms and same with the competition but the size of each firm is quite small. So, it cannot easily influence the market price through personal action. Monopolistic competition has a lot of companies and the company’s products are not the same. The companies itself want to sell a large amount of their own products so they are trying to build their own product advantages. Finally, it creates advertisement, spending on advertising is referred to as cost of sales.
Product differentiation is one of the characteristic of monopoly. Each firm can produces a differentiated product under monopolistic competition. The substitutes are not perfect although the products are quite close to the substitutes and the products are alike but it is totally different. Monopolistic usually found in case of daily necessities such as shampoo, toothpaste, detergent, medical products and others. Monopoly is a common feature of the information available to others production technology control. This specialized information often is in the form of patent, copyright or trademark established by law. Although these legal barriers to enter, they also pointed out that the information is not completely shared.
Enterprises under the conditions of monopolistic competition are free entry and exit. It means that they can free to join and leave the industry at any time. They can easily quit the market if there are any losses and the firm has no power to control over other firm. Besides that, firms under monopoly are lack of perfect knowledge of the market because the products are close substitute to the others so the buyers normally do not know more information of the products like the qualities and prices. At the same time, a seller also doesn’t know the preference of the buyers.
1.2 Conclusion
A pure monopoly is a single supplier market. Regulatory purpose of the existence of monopoly power, individual enterprises can control a particular market to 25% or more. Monopolies can form for all kinds of reasons. If an enterprise has exclusive ownership of scarce resources, it has a monopoly power of this resource, and is the only one you can use it. Producers may have a design idea of patent or copyright, sound, name, text or images and let them exclusive rights to sell goods or services. A monopoly could be created following the merger of two or more firms and it can reduce competition. The monopoly of the traditional perspective emphasizes the social costs and higher prices.
1.3 Monopoly Graph
2.0 Introduction
Market structure described a particular organization of the market have certain key features in a specific tissue. The characteristics are the number of firms in the market, control the prices of related products, types of products on the market, can discourage new enterprises to enter the market and the presence of non-price competition in the market. The number of firms in the market can consider form an important basis in the market to supply the particular product for category market structure. The individual companies exercise control over the price, its sales of products is another important feature of the market structure. It can distinguish between a characteristics of the market structure classification used in the company’s products in different industrie