Monopoly Vs Oligopoly: MONOPOLY: It is a situation in which a single company or a collection owns all or nearly all of the market for a given type of product or service. Monopoly is characterized by an absence of competition, which can result in high inferior
We are living in a free market economy age where business entities are engaged in competitive practices. This sometimes (if not always) leads to the monopolisation of the market by way of anti-competitive agreements, abuse of dominance, mergers and takeovers between business entities which result in distortion of the market. Most countries in the world have enacted competition laws to protect their free market economies and have thereby developed an economic system in which the allocation of resources is determined solely by demand and supply. Although the antitrust laws are very much new to the Indian regulatory framework but the western countries likes US and Canada has this kind of regulatory framework since last decade of the 19th century.
Monopolistic competition is a type of imperfect competition in which many producers sell their products that are differentiated from one another in terms of branding or quality. And so these products cannot be perfect substitutes. Monopolistic competition is a form of imperfect competition. Found in many real world markets ranging from of sandwich bars and coffee stores in a busy town centre to pizza delivery or hairdressers in a local area. Diminutive nurseries and old homes might also fit into the market structure known as monopolistic competition since they do not have any other substitute.
ABSTRACT Monopoly can be understood in very simple term meaning a market which has only one seller and there are no close substitutes for that seller’s product or service. Sometimes the term “monopoly” is technically referred to the market itself but usually it is referred to the seller who has created monopoly in the market. The single seller is otherwise called as “monopolist”. Monopoly to be really effective in the market should practically have no substitutes for the product or service at all and also there should be no threat of the entry of a competitor into the market. This gives the monopolist a perfect control over the pricing of the product or service.
In a monopoly market, there is only one seller. The seller controls the price and supply of a product or service. A monopolistic can also control the market because there is only one service in the market and will get a lot of buyers. In a monopoly market, the products are unique and do not have similar substitutes. All the units of a product are similar and there are no alternative to that commodity in the firm.
The goods and/or services produced by a monopolist firm have no close substitute. As mentioned above, a monopoly exists when the market is controlled by a single producer. A monopoly is the complete opposite of perfect competition as they do not have to compete with anyone else in their industry. “The output of the monopolist, is the total industry output” (Webster, 2003, p. 332). Market Power.
Research Title Question 1 1. a.There are six assumptions of a perfect capital market, F.I.I.N.N.N. They are frictionless markets, infinitely-divisible capital assets, information efficiency, no one individual can influence the market, no collusion and no arbitrage opportunities. b.Frictionless markets is the main assumptions broken in the real word that matter to the individual stock investor. Frictionless markets means a ideal trading environment. There are no commissions for buying or selling securities if the markets are perfect.
2.0 Characteristic of Perfect Competition and Monopoly Sloman and Hinde (2007) point out perfect competition is a market in the condition broad range of firms selling the identical product without any restriction on entry and exit and price taker at the same time. The perfectly competitive model is used to analyze the market and evaluate the efficiency of the other forms of market organization. According to Sloman and Hinde, agriculture commodities such as vegetables, wheat and cotton are the example of the product in a perfect competition which has a large number of producers. Perfect competition has no market power to determine the market
That idea is still around the world today. The name of their book? “The Communist Manifesto”. Communism is a society where private property and social classes are non-existent, the government owns any and all materials required to make products, and gives the public what they need to get by. One important point of Communism is that there are no social classes.
Imperfect competition is different with perfect competition, which has several characters. Perfect competition means in a market no one or two supplier can decide the price, suppliers offer similar products, suppliers can leave with free of charge and there is no barricade for others to enter. A typical example of imperfect competition is monopoly, which there are only one supplier in an industry and supplier control the price. Monopolies often prevent other to enter the market. In this situation, the market is controlled by the only one supplier for reasons, like patenting and policy.
This model’s assumptions are that, the capital markets are perfect, meaning that no investor can influence the market value of a company’s shares. That there is no difference between the tax rates on the dividend payments and capital gains. The company has a fixed investment policy which will have no charge, meaning that the retained earnings are reinvested. This model also believes that there is no floatation. Bird in
• No Entry or high barriers: There is any freedom to other producers to enter the market as the monopolist is enjoying monopoly power. There are strong barriers for new firms to enter. There are legal, technological, economic and natural obstacles, which may block the entry of new producers. • Firm and Industry: Under monopoly, there is no difference between a firm and an industry. As there is only one firm, that single firm constitutes the whole industry.
1.0 Introduction Perfect Competition Perfect competition is a single firm that provisions a specific decent or benefit, and that firm can charge whatever value it needs since customers have no choices and it is troublesome for would-be contenders to enter the marketplace. Monopolistic Competition Market circumstance halfway between the extremes of Perfect competition and Monopoly business model, and showing highlights of the both. Oligopoly Oligopoly is a market structure whereby only a few firms dominate.. Though a few firms are in control, it is possible that many small firms may also function in the market. Monopoly Monopoly is market structure characterized by a single seller, selling unique product with the restriction for a new firm to enter the market.
Monopoly and Price discrimination of Indian Railways --------------------------------------------------------------------------- Prepared By: Name :Mohamed Ali .K ID :2016hb74036 Email :email@example.com Assignment: Managerial Economics Do you think Indian Railway is an example for monopoly market? What are the types of price discrimination that Indian railway practice? Introduction In economics, monopoly in its pursuit form is the case of a single seller. The market demand for its product is the only constraint on the firm’s pricing policies. Barriers to entry prevent new firms from coming in to industry.
What and why of a monopoly market: A pure monopoly is established when a single supplier is dominant in the market. For the purposes of regulation, monopoly power exists when a single firm controls 25% or more of a particular market. Essentially, monopoly is formed when a firm exerts exclusive ownership of a product that is either scare is nature or the quality produced is so supreme in comparison to others in the market, that the entire economy depends of the said firm to satisfy its needs of the product. Over a decade ago, Microsoft’s Window commanded over 95% share of the market. This was precisely due to the lack of availability of a quality substitute at that time.
Absolutism is a name given to a system where all the responsibilities are given to just one person. All the decisions are made by the monarch. Therefore, it means that an absolute monarch governs alone and is not controlled by anyone. An absolute monarch has control over administration, taxes, foreign policy etc. Under the control of a monarchy there is less corruption.
Therefore, consumer has no reason for preferring the product of one supplier over those of other suppliers. Consumers in this market know the product's way being sold and the cost charged by every firm. All discrepancies in prices quoted by the suppliers will be known instantly, and consumers will purchase at the most minimal price. The effect of any buyer or seller’s decision on the price of the product is insignificant. The output that each firm can give is small relative to total output of the industry such that the firm is a price taker and the adjustment in their output does not have significant effect on the market price of the product.
For advantages, it’s easy to create a sole proprietorship. In effect, there is no creation cost or time, since there is nothing to create. The entrepreneur in charge of the business simply starts doing business, charging money, and providing goods or services. Depending on the business, some sole proprietors may need to obtain permits or licenses before they can begin operating. Do not confuse these governmental permits with legal approval for a business organization; in a sole proprietorship, the license is granted to the individual owner.
Economic integration is like a continuum line that have two different ends. First is no integration at all means the country is a single economic that have no agreements with other parties. And the other one is a complete integration which have the fully advantages of economic integration. The table above is the basic explanation about the economic integration levels. But we will only focusing from the Free Trade, Customs Union, Common Market, and Economic Integration.