Monopoly questions and answers Essay

In a monopoly, and at the put down of supply in the market one entity to control and contain, and the breaker point of the price offered and the control exercised by the institution or individual is greater. wolfish set. This feature of the advantages of a monopoly consumers. These atomic number 18 short term market gains when prices dropped to knock against the demand of rare product. Suppliers and consumers directly benefit from an attempt to monopolize the conjunction to add the sale of business marketing.Price flexibility With regard to the demand for the product or profit offered by the company monopoly or individual, and is impose by the price elasticity of the ratio of the absolute value of the increase in prices and demand in the market. Lack of creativity At the expense of absolute control of the market, and monopolies display a tendency to lose cogency over a period of time. With one product lifetime, and innovative digit and marketing techniques rear seat. La ck of competition.When the market was designed to serve the monopoly and the miss of commercial competition or the lack of goods and viable products shrinking the electron orbit of perfect competition. 2-How monopoly arises Monopoly arises in a variety of circumstances there are types of goods and a service does non accept by its nature, or not in the public interest to multiple producers, its called natural monopolies, for modeling to provide the city with water, electricity, or the trains running between two countries. frequently assume the state or municipal authorities to manage these services, or to grant a concession to a private company, subject to unforgiving control. Monopoly may arise in an industry, the growth of a project, and it seized on new(prenominal) projects. Or as a result of grab or flux of small projects in the large-scale project, Monopoly May arise due to symmetry between the projects owners in a particular industry to determine the price, or divide m arkets among themselves, known as (cartel), and in this case there are a number of producers, such agreement among them makes them a monopoly power.Most of the countries pack been working on the subject of monopolies control. 3-How we can regulate the monopoly Pricing at marginal cost Economists have for many decades argued the benefits of setting public public utility company tariffs on the basis of marginal cost. This view is expressed in many classic economic texts on regulation. Price discrimination One usual objection to marginal-cost pricing is that, in the presence of economies of scale, a simple analog price equal to marginal cost would not allow the modulate firm to recover sufficient revenue to cover its total costs.Ramsey pricing In those cases where the regulator is unable to set the marginal price for severally service equal to its marginal cost, economic theory still places substitution emphasis on reducing the deadweight loss. Incremental cost The deadweight-los s hypothesis has a hard time explaining why regulators fail to pursue policies which are streamlined under the conventional economic theory, such as Ramsey pricing. Price / service stability.Another puzzle for the conventional economic approach to regulation is the lowering emphasis on price stability. There is a sizeable amount of evidence that price and service stability is one of the primary concerns of regulators. selection regulation To encourage the productive efficiency of the monopolist. To eliminate the incentive to decompose resources seeking to obtain a position of monopoly. To protect the sunk enthronement of the monopolist 4-Give some examples of monopoly type of monopolyThe main characteristicexamples.NaturalAccess to rare and not easy reproducible elements of productionMonopolies operating in the sphere of production is mineral deposits of strategical importance for the national economy technologicalFeature production in this technology is not enough consum er demand to support many competitive firmsEnterprise for the production of ad hoc goods, such as infrastructure for the operation of natural monopolies.GeographicCompetition due to the non-rationality of the territorial reserve limited due to the effect of geographic barriersPublic transport companies infrastructureInfrastructure network a network that supply products between distant from each other (both in space and in time), economic agentsBackbone enterprises in energy, rail transport , heat, blow out and water supply patentUsing a unique patented technologyNatural monopolies are producing hi-tech products, such as medicine StateMarkets related to the exclusive jurisdiction of the stateDefense, aeronautics administrative commandOperating in a command systemNatural monopolies in the administrative-command system.