The Existence of a Monopoly and Public Interest
A monopoly is defined as the sole supplier of a good or service with
no close substitutes in a given price range. A pure monopoly will
therefore have a 100% market share i.e. the firm is the industry. They
exist and can only remain as monopolies if there are high barriers to
entry to the industry. In the case of a natural monopoly, economies of
scale are so large that any new entrant would find it impossible to
match the costs and prices of the established firm in the industry.
Other barriers to entry include legal barriers such as patents,
natural cost advantages such as ownership of all key sites in the
industry, marketing barriers such as advertising, and restrictive
practises designed to force any competition to leave the market. In
this market structure it is also assumed profits are maximised and
there is consumer rationality.
Traditionally monopoly is thought to be a potentially harmful market
structure with unwelcome consequences for the consumer and the
economy. Competition has always therefore been seen to be desirable.
It could be said therefore to be against the public interest. However
there are arguments not only against monopolies but also for their
existence.
One of the main arguments against monopolies is that they raise
prices, restrict output and therefore exploit consumers. This is
because the neo-classical theory of the firm assumes that a monopolist
will maximise profits which means it will produce where MC=MR. The
equilibrium profit maximising level of output will therefore be where
MC-MR. This is shown below:
The diagram above shows the firm will produce the quantity Qe and will
charge the price Pe. As the monopolist above is...
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...s to large
firms in the economy. Should it split them up or promote such firms.
Competition policy therefore reflects the attitude towards monopoly.
At the moment the UK has a pragmatic approach where monopoly can be
good or bad. I t uses the monopolies and mergers commission to use a
case-by-case approach. Competition policy is a government policy to
influence the degree of competition in individual markets within the
economy. Governments can also attempt to correct market failure caused
by monopolies by taxing supernormal profit away, set maximum price
levels, subsidise production, nationalise the industry, break it up or
reduce entry barriers.
In the past economists have generally come out against monopolies and
in favour of competitive markets. However, this is clearly not
conclusive as monopolies have many potential advantages and
disadvantages.
By the turn of the nineteenth century, American industry experienced a dramatic upturn in popularity. However, though this industrialization was crucial for America's economic development, it also inevitably led to social turmoil. Corruption was rampant among government figures, and they bribed people with money, jobs, or favors to win their votes. Referred to as the Gilded Age, this era was indeed gilded, masking a plethora of social issues behind a thin veil of economic success. The most notable problems stemmed from the justification of what was called laissez-faire economics, in which the poor were believed to be poor exclusively based on their own shortcomings. The abundance of disposable factory workers faced awful hours and were treated
When I researched which sectors of the economy are monopolized, I had a lot of mixed feeling about each industry. For example, I like that our health care industry is monopolized by the government because ordinary Canadians pay less for health care and prescription drugs. However, I dislike the monopoly in the telecommunications sector because of the poor customer 's service and quality of the product i.e. network throttling. Although, I believe this type of monopoly is necessar·y to more our network infrastructure forward.
...ecause they feared that Slavery would soon be completely abolished. These tensions eventually led to the civil war where the North won and slavery was ended although there were still slave like laws in place after.
Slavery was abolished in the North when Abraham Lincoln signed the Emancipation Proclamation in 1863. This proclamation upset the southern states and they decided to sever their ties with the rest of the country. In the textbook it says, "Northerners saw the South as a slave power, determined to foist the slave system on free labor throughout the land. Southerners saw the North as full of black republicanism, determined to destroy their way of life" ...
"The American constitution recognized slavery as a local constitution within the legal rights of the individual states. But in the North slavery was not adaptable to the local economy, and to many, it contradicted the vision of the founding fathers for a nation in which all men are to be free. The South considered slavery as a necessary institution for the plantation economy. It was linked to the local culture and society. As the United states expanded, the North worried that the South would introduce slavery into the new territories. Slavery had become both a moral issue and a question of political power." (Kral p61)
The North felt like the south wanted to completely monopolize the new territories and make every one of them slaveholding. Northern states also held the belief that slavery was meant to be temporary and seemed morally wrong. The North and South each believed they were right in their beliefs, “Both remained convinced that the other would stop at nothing to achieve domination” (Fellman 65). An Illinois newspaper as quoted by Fellman regarding the South says, “She aspires to nothing short of absolute
Obviously, Northerners would be appalled by the barbarism associated with slavery, the beatings, the separation of families; but they were not. Most appalling to Northerners was that slavery did not encourage social mobility, education, or industrial expansion in a society. This was in direct conflict with northern views. The North had always been an industrious society. Ever since the Transportation Revolution of the early 19th century, the North progressed while the South stagnated. The North produced steel and iron while the South's mainly produced cotton. This is not to say that the South was not an economically prosperous region, but it was just not built "in the North's image of industrious."
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. Although firms in oligopolies have competitors, they do not face so much competition that they are price takers (as in perfect competition). Hence, they retain substantial control over the price they charge for their goods (characteristic of monopolies).
During the Gilded Age, many new industries come into light, new ways of business,all because of industrialist.
More so, they even auctioned off slaves to the South. But one thing remains, with the industrialization of the United States followed the minimizing of slavery. The North did not focus on European immigrants for slave work; they would be hired by factories in cities for labor. These were hardworking Europeans who were looking for life in a new world to feed their families. These people were not owned or beaten. In there lies the difference between slavery in the North and in the South. While slavery continued to flourish in the south, the Northern territories began to establish what America is known for today; a land of opportunities. They brought in European immigrants who were paid a measly wage but nonetheless were able to build a life for them outside of the mistreatment and inhumanities that came along with labor in the South. In fact, even former slaves travelled north for opportunities that were not available in the south such as: higher wages, less strenuous work, and a chance for an
From the very start of history that was recorded and known, slavery was not a problem, it was considered conventional, and existed in every colony in the United States. As time passed, slavery slowly faded away in the North for the reason that there wasn't a lot of gain or necessity. At the time, almost all of Americans had the same view; they thought slavery would disappear forever.
Slavery was so important and spread in because of agriculture and economic value that occurred in the Southern Colonies. When the North was developing economic foundations, the root of it was shipping and manufacturing industry whose primary workforce consisted of poor families. Slaves were not used in shipping because you needed qualified and skilled sailors, were unskilled manual laborers could not be used. The families who owned farms had a work ethic that emphasized personal independence, which didn't agree with slavery in general. Most Northerners couldn't afford to own slaves because the farms in the North were family farms that produced grains, vegetables, and livestock that supported the families, communities, and cities, not emphasizing
In conclusion the North had viewed slavery as morally wrong, but the South required it for their businesses both agricultural and industrial to not only survive but thrive. The Civil War not only fought for morality but for a group of people’s economy.
In the years 1800-1850 the North and South of the United States were very different but they clashed head on as people expanded west. As people from both sides of the US moved Westward they took there beliefs, traditions and attitudes with them. Due to the West being nearly empty it was a blank slate for the people moving there to paint with their own beliefs, economies and ways of life. However this was not easy, because there was such a deep riff in the lives of people from clashing sides of the US. Both the North and South of the Early United States had different economies, social structures, ways of life and ideas on the issue of Slavery.
Perfect and monopolistic competition markets both share elasticity of demand in the long run. In both markets the consumer is aware of the price, if the price was to increase the demand for the product would decrease resulting in suppliers being unable to make a profit in the long run. Lastly, both markets are composed of firms seeking to maximise their profits. Profit maximization occurs when a firm produces goods to a high level so that the marginal cost of the production equates its marginal