Monopoly

Running Head : MONOPOLY[Writer s Name][Name of Institution] is such a model of commercialize structure , where thither is only one firm or company which produces and supplies the whole market with a sure ingathering . Therefore , in terms of monopoly , the entire market or perseverance consists of only one producer . Pure monopoly tail hardly practically take place , but there are examples which are very oddment to monopoly . In incident , in many countries such services as inwrought gas water , telephone or other common services are governmental monopolies .McConnell and Brue , the authors of famous Economics , key out the following characteristics of monopoly (1 ) a single seller (2 ) no close substitutes of the production (3 ) monopolist can control the price for the product to a great extent (4 ) there are certain barriers to enter the market , like legal barriers (license , patent , etc ) or possessing special unique resources , and so on (5 ) non-price competition , or producing standardized products (McConnell Brue , 2004 , 438-439Since a monopolistic company represents the entire industry , the curve of its demand is identical to the curve of The rule of maximation of the profits (MR MC ) is valid for monopolistic market . but , a monopolist does not try to minimize fair(a) costs and has a tendency to lower the amount of the goods produced in to keep the prices higher .

This brings to misallocation of the resources , so the price in monopolistic market usually is higher than marginal costsPure monopoly is supposed to be not healthy for national economy beca phthisis it frequently ignores the rules of unaffectionate economic system (in contrast to pure competition , because there is no stimulus for a monopolist to optimize the use of the resources , improve the quality of goods or lower the costs . That is why in to limit possible abuse of monopolistic king governments have to regulate and keep under control monopolistic markets by imposing some taxes or creating other legislative barriers for monopolistsReferencesMcConnell , C .R Brue S .L (2004 ) Economics : Principles , Problems , and Policies . 16 ed . N .Y : McGraw-HillPAGEPAGE 2...If you want to get a full essay, order it on our website: Orderessay

If you want to get a full essay, wisit our page: write my essay .