Free Competition Vs Monopolistic Competition

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There are two different types of competition in a market, monopolistic competition and free competition or also known as perfect competition. An example of a monopolistic competition or monopoly is the market in China, where only one company or firm distributes resources and good. An example of a perfect competition is the United States or Singaporean market in which people are free to enter or exit the market. The question is, is a free market competition better than a monopolistic market competition? A free market competition is better than a monopolistic competition because there is little constraint for people to enter or start a business in the market and consumers are able to set the price based on the demand vs. supply concept. A clear…show more content…
Taxes and policies is what make producers to hesitate from entering and starting a business in a free market. Unlike in a monopoly, most of the constraints prevents producers from even entering the market, yet for those who have the chance to enter are most likely to gain a much higher percentage of profit compared to a company that sells and distribute the same product in a free competitive market. However, the policies and regulation in a free market is what protects the consumers from dangers. Producers who sell food products are monitored by the government on the quality of the food that is produced, so that the people or consumers health are protected. Producers who sell motor vehicles have more constraint in order to insure the safety of the people. The purpose of all this constraints being imposed on producers is to protect the well being and health of the people or…show more content…
The type of economy a communist country would have would be considered a command economy. In a command economy only a few people owns the resources, whereas in a free market economy the people have the right to own resources. In a market economy people can live their life the way they wish. The type of economy has a huge influence on the type of government. In a command economy, the market can control the goals of the economy. An example is how in a command economy, all resources can be used to developing military weapons, while in a free market resources are used to make a profit and benefit both the producers and consumers. “A command economy is hence a creature of state authority, whose marks it bears and by whose hand it evolves, exists, and survives. Command economies are imposed, whether through external duress or imitation, or indigenously in order to achieve specific purposes such as: (1) maximum resource mobilization towards urgent and over-riding national objectives, e.g. rapid industrialization or the prosecution of war; (2) radical transformation of the socio-economic system in a collectivist direction based on ideological tenets and power-political imperatives; and (3) not the least, as an answer to the disorganization of a market economy through price control, possibly occasioned by inflationary pressure arising

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