2. Provide an example of a government-created monopoly. Is it a bad public policy? Why?
In many cases, the emergence of monopolies linked to the provision by the government to an individual or company exclusive rights to sell the goods (tobacco, salt, etc.).
A classic example of a monopoly that arises due to the possession of a resource, such as a diamond company.
The power of a government-created monopoly over the market depends on the existence of close substitute products. If people view emeralds, rubies and sapphires as quite worthy substitutes diamonds over the market power of a relatively limited. In this case, any attempt to achieve increase of diamond prices will lead to the fact that consumers will switch to the acquisition of other precious stones. But if people believe that these stones are considerably inferior diamonds, the company is able to significantly affect the market price of the latter.
Sometimes the appearance of such a monopoly becomes the result of political influence.
Example of monopoly in the service of the public interest is patent and copyright. If the pharmaceutical company opens a new drug, it may apply to the relevant government authorities for obtaining a patent. If they find a new drug is really original, issued a patent granting the developer the exclusive right to produce and sell the drug. Similarly, when a writer finishes a new work, he can register the copyright (government guarantee) that no one else has the right to publish and sell a book without permission of the author. Copyright makes writer to the sale his book.
3. What is the prisoners’ dilemma and how does it relate to oligopoly?
Analysis of profit oligopoly identical as monopoly profits: in the short term it can get positive, zer...
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... negative externalities you face on campus.
First positive externality I face on campus is staying inside because everything that I need for studying is near: faculty, library, pavilion. It does not take a lot of time to get from my college to faculty or library.
Second positive externality is that almost all my friends currently staying inside the campus. So, we can easily meet up for dinner or discuss group assignments. It is also very nice when we meet each other near collage so often.
Third positive externality is that I don’t spend money for fuel if I had a car. But there is no need for a car since everything is near.
First negative externality on campus is scheduling of bus because it never comes on time. Students have to wait for bus in hot weather or they even can come late because of it.
Second negative externality is food.
Third negative externality is
...tually break up monopolies when they formed, by specific legislation” (600). They see that the government is letting the business tycoons to own whatever land they want and extend their fortunes. Unlike the first two books, Johnson’s book discussed the history of the book without bias and from a different perception; one that was not came from an American view.
First the story of the Standard Oil Company briefly describes the limits of power. When Rockefeller was trying to take over the market he formed the “South Improvement Plan. When this occurred the public grew very angry with the price of trains, so nobody went on the railroads and Rockefeller eventually got the bill, until prices changed. This is an example of how the consumers, make the company run and when nobody wants to buy your product the individual must adjust. Another example would be when the Standard Oil Company was primarily the only oil company and was forced to split into thirty nine different independent companies. This shows that one business cannot control the entire market and interventions will need to be done accordingly so that a company does not have all the power.
Topic A (oligopoly) - "The ' An oligopoly is defined as "a market structure in which only a few sellers offer similar or identical products" (Gans, King and Mankiw 1999, pp.-334). Since there are only a few sellers, the actions of any one firm in an oligopolistic market can have a large impact on the profits of all the other firms. Due to this, all the firms in an oligopolistic market are interdependent on one another. This relationship between the few sellers is what differentiates oligopolies from perfect competition and monopolies.
Based on the integration of a cartel of its type in the diamond market, I see it fit to say that the price of diamonds is set above what is reasonable. This essay will expound the role of the diamond cartel in cinching the high price charged by all those involved in selling diamonds. (Levenstein, Suslow, 2008: Cartel) states that cartels are agreements or associations between or of firms, with the aim of fixing prices and/or limiting output. These can operate in multiple ways, from rigging auctions, to separating their firms far from each other, making it seem as though they are the only supplier of a specific commodity within a certain area and thus limiting supply within their respective area. On average, cartels last just about five years and then end, often as a result of legalities, seeing as cartels are most commonly illegal.
A monopoly exists when a specific individual or an enterprise has sufficient control over a particular product or service to determine significantly the terms on which other individuals shall have access to it. A monopoly sells a good for which there is no close substitute. The absence of substitutes makes the demand for the good relatively inelastic thereby enabling monopolies to extract positive profits. It is this monopolizing of drug and process patents that has consumer advocates up in arms. The granting of exclusive rights to pharmacuetical companies over clinical a...
When a monopoly occurs because it is more efficient for one firm to serve an entire market than for two or more firms to do so, because of the sort of economies of scales available in that market. A common example is water distribution, in which the main cost is laying a network of pipes to deliver water.
Having longer open house hours or no time limit on open house hours can benefit the student’s relationships. They would have more bonding time to make their friendships stronger. Students lives would be happier and less stressful if they did not have to worry about whether or not their friends from the opposite gender can be in their room at certain times. Sometimes students just need a friend to talk to late at night, or a shoulder to cry on when things get tough, especially since we are young adults just leaving home. We deal with quite a few changes in our lives trying to adapt without our family being around, so having friends is going to be important, and we should not be limited on when they can see each other. Friends are like family to college
Monopolies are when there is only one provider of a specific good, which has no alternatives. Monopolies can be either natural or artificial. Some of the natural monopolies a town will see are business such as utilities or for cities like Clarksville with only one, hospitals. With only one hospital and there not being another one for a two hour drive, Clarksville’s hospital has a monopoly on emergency care, because there is not another option for this type of service in the area. Artificial monopolies are created using a variety of means from allowing others to enter the market. Artificial monopolies are generally rare or absent because of anti-trust laws that were designed to prevent this in legitimate businesses. However, while these two are the ends of the spectrum, the majority of businesses wil...
A firm that is the main dealer of an item or service having no nearby substitutes is said to practice a monopoly. A natural monopoly is an imposing business model that exists because of the fact that the cost of delivering the item is brought down because of economies of scale and there is only a solitary producer than if there are a few contending producers. This ordinarily happens when fixed expenses are vast with respect to variable expenses. Subsequently, one firm can supply the aggregate amount requested in the market at less cost than at least two firms so part up the common imposing business model would raise the normal cost of generation and force consumers to pay more.
Posner, R.A., (1975) The Social Costs of Monopoly and Regulation, The Journal of Political Economy, Vol. 83, No. 4, pp. 807-828, The University of Chicago Press
Monopolies have a tendency to be bad for the economy. Granted, there are some that are a necessity of life such as natural and legal monopolies. However, the article I have chosen to review is “America’s Monopolies are Holding Back the Economy (Lynn, 2017)” and the name speaks for itself.
An oligopolistic market has a small number of sellers dominating market share and therefore barriers to entry are high. These sellers are highly competitive and do not act independently of each other. Access to information is limited so sellers can only speculate of their competitor’s actions. Sellers will take advantage of competitor’s price changes in order to increase market share.
A monopoly is “a single firm in control of both industry output and price” (Review of Market Structure, n.d.). It has a high entry and exit barrier and a perceived heterogeneous product. The firm is the sole provider of the product, substitutes for the product are limited, and high barriers are used to dissuade competitors and leads to a single firm being able to ...
...school. Time is not an issue for students living on campus because they reside at the college, which makes it a lot easier to get to class. Whereas, students, who commute struggle to get up in order to catch a bus or two to get to class on time. Students living on campus can spend extra money on other things such as movies since they don’t have to pay for food or transportation. In contrast, students who commute need to save money on the side in order to have access to public transportation to get to class and pay for food at the school. Students living on campus are familiar with places around the college and they know more students. However, students commuting don’t have time for this since they are more worried about getting home on time. Living on campus should be considered by most college student since it appears to be a lot less stressful than living at home.
The type of firm we are going to investigate in this assignment is an oligopolistic firm. The essence of an oligopolistic market is that here are only a few sellers. As a result, the actions of any one seller in the market can have a large impact on the profits of all the other sellers. Oligopolistic firms are interdependent in a way that competitive firms are not. The company we chose to study is Petronas.