A monopoly from start to finish Essay

During out studies this status we take in examineed a mount roughly a Monopolistic government agency a friendship is equal to(p) to send in the art market and I would like to refresh your mind by offering a clear definition. A Monopoly is a situation in which an entity, some(prenominal) an individual or an labor or organization, is the sole provider of a cross good or servicing. As such, this supplier has no competition from other suppliers and is able to see the market value of the commodity. whatever monopolies atomic number 18 government-enforced or controlled, while others constellation natur solelyy or through company merger.According to our focus of this paper, we argon inquire about the long-run agonistic balance of the Wonks Company that was earning a normal order of return and were competing in a monopolizerically rivalrous market anatomical social system. One of the covering dogs we must fare regarding this transpose in business structure is h ow the companys shift to a monopoly leave al wholeness realize the s generateholders involved. One of the stakeholders who may be involved is the government. Monopolies sanctioned by the government are called legal monopolies.These are considered coercive monopolies, meaning that other companies are forbidden by law to get by against them. Governments likewise maintain some control over monopolies through competition laws, which hold back monopolies from engaging in unscrupulous or anti-competitive suffices (http//www. reference. com/motif/Society/advantages-disadvantages-of-monopolies). The second question is how a Monopoly will affect other businesses and after research it is quite demonstrable from the definition of a monopoly that other companies do not have to worry about competition from other companies in the corresponding market.Consumers are affected by this change because they must either grease ones palms the intersection or service from the monopoly or do witho ut it. When a company transitions from a monopolistically competitive theatre to a monopoly, there will be changes with regard to legal injurys and output from two of these market structures. So, lets take a closer look at how wrongs are affected when a unfluctuating be deducts a monopoly. A common practice among some monopolies is legal injury discrimination, in which the monopolist charges some segments of the population more(prenominal) than others for the akin product or service, based on a higher need or a wealthier consumer base.This would usually be called price fixing which is an agreement between participants on the kindred side in a market to buy or look at a product, service, or commodity barely at a fixed price, or maintain the market conditions such that the price is maintained at a apt(p) level by controlling turn in and demand. When the monopoly is able to prevent buyers from re exchange their product, they may be able to price discriminate to try the ef fects of monopoly power. In my opinion the almost all important(predicate) group that is affected by a Monopoly are the consumers.Monopolies can impress consumer prices in two obviously distinct slipway, they can cause prices to drop so piteous that it forces companies out of business or it an cause prices to skyrocket making it exhausting for consumers to purchase a product, neither beingness a good option for the consumer. If one business is the plainly provider of a product or service, the consumer is forced to recompense whatever the price they demand. This can in addition lead to the company providing a low quality product or service without fear of losing business (Home, 2009).Since monopolies are the all provider, they can set pretty more than any price they choose, regardless of demand, because they tell apart the consumer has no choice. Is this sift of thing seemly to consumers? Of course not, notwithstanding it is how big business is able to stay on top o f the market. For example, most people find that orchard apple tree products have an outrageous price tag, but I have come to learn that the quality of their products is outstanding and I pretend that Apple will continue to mug up in popularity for years to come.It has also come to my attention that because Monopolies try to monitor the price of products they may resort to price discrimination. toll discrimination is sometimes defined as the practice of a firm selling a homogeneous commodity at the homogeneous time to unalike purchasers at different prices . Of course, I believe it is important to understand what and how price discrimination occurs. hurt discrimination exists when two similar products which have the same marginal cost to receive are sold by a firm at different prices.This sort of practice is highly controversial in terms of its impact on both consumers and rivals (Price Discrimination, 2006, p. 1). There are many ways to accomplish these sort of conditions be cause the transactions sure enough need not be coincidental indeed, there is temporal discrimination, such as between Sun twenty-four hour period rates and week, day rates, matinee and evening prices, peak rates and off-peak rates, moderate and off-season prices. To sell different qualities or products with different marginal cost at the same price, or to buy different qualities or factors of different efficiency at the same price, is also discriminatory.Based on all of this useful information we must also answer the question regarding which market structure is more beneficial for Wonks to operate in and will this market structure benefit consumers? In my opinion it is based on the level of quality and service of the products and how much(prenominal) consumers are willing to pay for the products they fate to purchase. In a monopolistic competitive market the consumer may choose to purchase a substitute product for a lower price, but only if the consumer determine price over va lue.Of course with a monopoly there may be only a few companies offering a substitute product. If one companys product becomes too high in price, the consumer will eventually look for another(prenominal) brand that offers similar use. According to economist, the monopolistic competitors demand rationalise is less elastic than a virtuous competitor and more elastic than a pure monopolist. Monopolistic competitors have excessiveness capacity which means that fewer companies in operation(p) at capacity could supply the industry output.It is my opinion that Wonks might operate more beneficially as a Monopoly than at a Monopolistic Competitive firm because they will not have as much competition to deal with and they can corner the market with value and price.Resources 1. McChesney, F. S. , Shughart II, W. F. , & Haddock, D. D. (2004). ON THE INTERNAL CONTRADICTIONS OF THE LAW OF ONE PRICE. economical Inquiry, 42(4), 706-716. doi10. 1093/ei/cbh091 2. Mainwaring, L. L. (1977). MONOPOL Y POWER, INCOME DISTRIBUTION AND PRICE DETERMINATION.Kyklos, 30(4), 674. 3. https//www. fcsknowledgecenter. com/uploads/2011_Row_Crops_Industry_Perspective. pdf 4. http//academic. udayton. edu/lawrenceulrich/Stakeholder%20Theory. pdf 5. http//www. answers. com/ return/mergers-and-acquisitions 6. http//www. helium. com/items/1405663-what-is-a-monopoly-what-do-monopolies-do-how-is-the-economy-affected-by-monopolies 7. Case, K. E. , Fair, R. C. , and Oster, S. E. (2009) Principles of Microeconomics (9th ed). Upper Saddle River, New island of Jersey Pearson Prentice Hall.