However, when the monopoly firm is established, the monopolist may spend some money on advertisement to acquaint the consumers about his product. But he will spend on advertisement only once. On the other hand, due to large number of firms and existence of competition among them, expenditure on selling costs is essential under monopolistic competition. 5. The monopolist can charge different prices from different customers for the same product and can adopt the policy of price discrimination.
Market Power. A monopoly is defined by its market power. Monopolies are known to dominate and maintain exclusive control over its particular market. Even though a monopoly has market power, they are still somewhat limited by market demand. Having market power gives a firm the ability to charge higher than normal prices without losing all of its customers.
This gives some monopoly power to an individual firm to affect market price of its product. Under monopolistic competition, products are differentiated and these differences are made known to buyers through selling costs. Selling costs is the expenses incurred on marketing, sales promotion and advertisement of the product. This is to persuade the buyers to buy a particular brand of the product in preference to competitor’s brand. Because of this, selling costs constitute a substantial part of the total cost under monopolistic competition.
It created tensions between states which may have led to a war between the competing parties. Such rivalries were driven mainly by two forces which are also considered long-term causes of WW1. b. Economic Competition (Capitalism): The need of capitalist economy for constant growth (new markets, more profits, new resources) had materially contributed to the phenomenon of imperialism and thus in the rivalry between imperialist states. In this respect, economic competition, is a basic long-term cause of WW1.
Namibia’s competition policy determines which business actions are allowed and which are not acceptable in the economy. Namibia’s competition policy is vital in strengthening the government in the domestic economic activities and this Allows government to concentrate on other important issues in the country. The competition policies create equal opportunities for firms to compete in terms of business basis, quality of output and not in terms of price fixing or quantity fixing. As it restricts collusion by suppliers, such as cartels and it also limits collusion between suppliers and their customers. For example, in the transport sector the competition policy are very clear and all private or public individuals in this sector must maintain this
Economic analysis is important in order to understand condition of an economy. The level of economic activity has an impact on investment in many ways. If the economy grows rapidly, the industry can also be expected to show rapid growth and vice versa. The degree of economic growth is directly proportional to the stock price i.e. when the economic activity is high, the stock prices are also high indicating the prosperous outlook for sales and profit of the firm.
Capitalist globalisation is dependent on a global hierarchy of power and wealth and on an inequality based on geographical, class and racial terms. It also thrives on an historic and unending assault on the people of the Global South by neo-liberal policy, global exploitation, and imperialist military and cultural apparatus. It has given little room for development in the Global South as it favors the Global North, industrialized countries. The common phrase used with globalization is that ‘the strong can now extract what it will, and the weak must surrender what it cannot protect’. This means the continent’s waters, land and resources which undermines the states’ sovereignty, security and integrity.
In economics, growth is mean by the increases of long-term capital per output of a country. Changing in technology is one of the major factors that impact the economic growth. In the growth of long-term, the economic environment of improving the technology can affect the productivity by more or lesser efficiency. Technology is defined as the production, qualification, utilization, and instruments of information, machines, strategies, frameworks, and techniques for association to solve the issue, enhance a previous answer for an issue, or accomplish a goal (Boundless, 2016b). The government of a developing country attempts to guarantee that the advances, aptitudes, learning, and strategies for assembling are tried and grown with the goal that
Name: Professor: Course: Date: Industry characteristics and possibility of collusion Introduction Collusion refers to a secret decree amongst the firms that are competing for market domination through cases of price market control (Peng 225). The core reason for the concealment is attributed to the fact that the behavior is deemed to be illegal through the antitrust laws in various nations. Collusion is core characteristics in the oligopolistic firms. The interdependent process of making decisions and intense rivalry encourages such firms in working together. Amongst the most significant way of reducing the competition is through joining through a process named as collusion.
88) concluded that in stimulating productivity, competition play a vital role through new firms, ideas and provoking movements of the market driven by entrepreneurs. This would not have occurred in their absence and growth would not be in the same pace as it is. He also thinks that innovation bustle deconcentrates the market. Acs (1996) stated that one factor for the growth in the employment rate in US is the increase in the rivalry. This reduces economies of scale, increases in import competitions and provided improved structures of vertical integration.