Principles And Applications Of Economics (microeconimics)

What are the causes and consequences of monopoly ? Why do economists recommend pro-competition policies The virtually underlying definition of a monopoly is a business unassailable which exists alone in the entire exertion . However , it depends on how narrowly the diligence is defined - what matters is how much power the monopoly holds varying with the amount of substitutes running(a) in the market by rival firms (Friedman , 2002 . For example , a cafeteria owner has monopoly in a university , but does not select a monopoly in the entire vicinity .

Like any(prenominal) different thing , there are two sid es to monopolies - it has its advantages and disadvantagesBARRIERS TO ENTRYThe most unmixed property of a monopoly is the restrictions to entry which are the blockages and obstacles for bleak firms for go into the industry Barriers to entry include factors such as economies of casing this is the reduction of cost per unit as the take take up of harvest-feastion increases Since monopolies are the only firms in their respective industries , they clear up the entire market demand (Grant , 2002 . To supply for that , the production direct is huge which gives the firm an economies of scale unlike other denudate firms who produce only a small amount . as well as , the cost of production for an established firm is always freeze off than a new firm because the new firm call for to make many expenses in the first place it can settle raft properly in the marketAnother b! arrier to entry is product specialism which is a clear peculiarity of one company s product it...If you want to get a full essay, order it on our website: OrderCustomPaper.com

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