Part 2 Two Arguments: He uses the divergence between price and average cost as the measure of monopoly power. Price discrimination is justified if it helps in promoting economic welfare.
May be, economies of scales could be realised only when the monopolist started producing for the foreign market. If he intends producing more, he can do so by increasing the use of variable inputs. Sometimes transport costs are so high that they act as a safeguard against the return of dumped goods.
Different prices can be charged in separate markets based on differences of elasticity of demand. Lastly, the Lerner measure is affected by changes over time in the ratio of capital to labour in an industry.
In many cases where there is perfect competition or simple monopoly, production of a certain commodity is not possible because its average cost curve lies above its demand AR curve.
Price discrimination is not only beneficial but is also justified when a country sells a commodity cheaper abroad than at home. Thus A PC are the super-normal profits which measure monopoly power. It can only be successful if the commodities sold abroad can be prevented from being returned to the home country by tariff restrictions.
The monopolist knows that any level of output other than OM would bring losses because the SAC curve would be higher than the AR curve. We offer reasonable rates that depend on the word count, deadline, writing level, and order type.
It, therefore, raises the average cost by the amount of the tax TC so that the AC curve shifts upward as AC] but the marginal cost remains unaffected.
Whatever the nature of the cost curves- straight line, convex or concave—the monopoly equilibrium will take place at a point where the marginal revenue equals marginal cost i.
Now the monopolist behaves as a perfectly competitive producer. First, grant of a patent right to a firm by the government to make, use or sell its own invention.
But one firm may be engaged in intensive non-price competition than the other firm. It implies the realisation of larger economies of scale, lowering of costs and prices to the home market also.
However, writing reply to a discussion is not the only activity our specialists are good at. In this essay we will discuss about monopoly market. Or, it may be proportional to the output, the amount of tax rising with the increase in output.
If you do not approve a revised work, you can apply for a refund. Can the oligopoly market structure benefit both consumers and businesses by forging common standards in industries that experience rapid technological change? There have been several mergers of large firms within oligopolies.
In public utility services, the higher income groups are charged higher prices and the funds so collected may be used to subsidies the goods meant for the poor. The lower is the price elasticity of demand the greater is the degree of monopoly power.
Therefore, if you need help in replying to a discussion board, contact us. Thirdly, all profits accruing to a firm are not monopoly profits. Competition would make the price equal in both the markets.
First, it is not possible to estimate the exact shape of the demand curve for the relevant output range. Thirdly, price discrimination is also related to the age, sex and status of the customers. A Short-Run Monopoly Equilibrium: Thus the monopolist sells more in the foreign market with the more elastic demand at a low price and less in the home market with the less elastic demand at a high price.
It is, therefore, under monopoly with no threat of entry of new firms that monopoly profits are the largest and the degree of monopoly power the absolute.No matter the topic and complexity of your discussion board post, do not hesitate to contact our respectable online company.
We have the discussion board post writer who is able to do your assignment in accordance with your specifications. Monopoly and Discussion Board Posts Words | 7 Pages fresh green beans * gasoline * In your analysis, please make sure to explain your reasoning and relate your answers to the characteristics of the determinants of the price elasticity of demand.
An Introduction To Monopoly Economics Essay. Print Reference this. Published: 23rd March, Disclaimer: This essay has been submitted by a student.
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Show More. 1. Elasticity * Analyze the determinants of the price elasticity of demand and determine if each of the following products are elastic or inelastic: * bottled water * toothpaste * cookie dough ice cream * fresh.
Feb 13, · Monopoly Essays (Examples) uses the same ideas but provides an overview of how they seem to be working out and this was an important aspect of the monopoly vs.
competition discussion that needed to be included in this paper. View Full Essay The players moved across the board, navigating a number of virtues and vices, with rewards for. Oligopoly Essays and Research Papers.
* Set-up a group discussion board and post the following information. Part 1) Industry Description: 1. Describe the firms in the proposed merger. Explain the difference between a monopoly and an oligopoly, the welfare effects of monopoly, cost advantages that create monopolies.Download