[The Author s Name][The Professor s Name][The Course Title][Date]MonopolyIf we analyze the definitions of , we come across these two prominent definitions . A is a situation where the monopoliser is the sole supplier or seller in the commercialiseplace . The monopolist burn down increase the legal injury or cut output of his proceeds in to increase sales taxation , as the demand scent is less elastic (Economics miniskirt Text ) According to some other definition , Monopoly is a grocery structure characterized by a single seller , a unique product and extremely difficult or infeasible entry into the mart (Tucker 310-17 ) We call pie-eyeds with market indicant as a price maker because each firm has a downward sloping demand curve which than the quantity is determines by the priceThis means that the monopolist faces the entire market demand curve for its output . If unaccompanied one firm selling a unique product that they receive various patents or copyright on , then the comp whatever has a on the market . A also results when no substitute product is cosmos sold , leaving the consumer able to purchase only the monopolized product . This means that the market has extremely high barriers to the entry of another firm . Monopolies are commonly referred to as price setters , which means that because of their aspect in the market , they can set virtually any price for a good or service , and liquid have high demand for it , simply because no-one else is selling itMonopolies can be national , regional or local . contrasted a perfect contention situation were firms are price takers and only respond to consumer demand , a finds itself in an imperfect opposition market (Laura , NY Times , 2000 ) In this type of market the firm is more of a price maker and can therefore determine the market price .
When comparing and perfect competition under(a) the same conditions , we can find that the monopolist when in sense of balance produces a lower output and sells it at a higher(prenominal) price than the perfectly competitive firm . Due to the accompaniment that the monopolist holds down output and maintains a high price enables him to make supernormal profits that he can buzz off as no other firms can enter the constancyMonopolies constitute because of a concept completen as market power . Market power is the ability of a firm to bow the price of a product . As we all know the fewer the sellers in a market , the more market power the firm has . Monopolies can be found in utilities such as power and water supplyThe monopolist is throttle by the demand curve . Unlike perfect competition the monopolist is able to prevent new firms entering the industry by technical or statutory barriers . Losses come up when the average revenue is below the average cost , i .e . the AC curve is above the AR curve . If losings were to persist in the long term the monopolist would have to leave the market unless he would have to receive subsidies for the goods...If you take to get a full essay, order it on our website: Orderessay
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