Monopoly questions and answers Essay

In a monopoly, and at the depreciate of supply in the market one entity to control and invite, and the degree of the value offered and the control exercised by the institution or individual is greater. Predatory pricing. This feature film of the advantages of a monopoly consumers. These are short term market gains when prices dropped to meet the demand of rare reaping. Suppliers and consumers directly benefit from an attempt to monopolize the company to annex the sale of business trade.Price flexibility With regard to the demand for the product or usefulness offered by the company monopoly or individual, and is dictated by the price elasticity of the ratio of the unattackable 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 efficiency everywhere a period of time. With one product lifetime, and innovative design and marketing techniques rear seat. Lack of competition.When the market was designed to serve the monopoly and the lack of commercial competition or the lack of goods and viable products shrinking the scope of holy competition. 2-How monopoly arises Monopoly arises in a variety of circumstances there are types of goods and a service does not accept by its nature, or not in the public interest to multiple producers, its called natural monopolies, for example to contribute the city with water, electricity, or the trains running mingled with two countries.Often simulate the state or municipal authorities to manage these services, or to concord a concession to a private company, subject to strict control. Monopoly whitethorn arise in an industry, the growth of a project, and it seized on other projects. Or as a result of grab or merge of low-toned projects in the large-scale project, Monopoly May arise due to agreement between the projects owners in a particular industry to determine the price, or severalize markets amon g themselves, known as (cartel), and in this case there are a number of producers, much(prenominal) agreement among them makes them a monopoly power.Most of the countries have been working(a) on the subject of monopolies control. 3-How we can regulate the monopoly Pricing at peripheral cost Economists have for many decades argued the benefits of setting public utility tariffs on the basis of marginal cost. This view is expressed in many guiltless economic texts on statute. Price discrimination One common remonstrance to marginal-cost pricing is that, in the presence of economies of scale, a simple linear price equal to marginal cost would not allow the regulated blotto 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 each service equal to its marginal cost, economic theory still places central focus on reducing the deadweight loss. Incremental cost The deadweight-loss hypothesis h as a ambitious time explaining why regulators fail to pursue policies which are efficient downstairs the conventional economic theory, such as Ramsey pricing. Price / service stability.another(prenominal) puzzle for the conventional economic approach to regulation is the heavy ferocity on price stability. There is a sizeable amount of picture that price and service stability is one of the primary concerns of regulators. Alternative regulation To encourage the productive efficiency of the monopolizer. To eliminate the incentive to waste resources quest to obtain a position of monopoly. To protect the sunk investment of the monopolist 4-Give some examples of monopoly type of monopolyThe main characteristicexamples.NaturalAccess to rare and not easily uniform elements of productionMonopolies operating in the sphere of production is mineral deposits of strategic vastness for the national economy technologicalFeature production in this technology is not luxuriant consumer dema nd to support many competitive firmsEnterprise for the production of specific goods, such as infrastructure for the operation of natural monopolies.GeographicCompetition due to the non-rationality of the territorial control due to the effect of geographic barriersPublic transport companies infrastructureInfrastructure net a network that supply products between distant from each other (both in spot and in time), economic agentsBackbone enterprises in energy, rail transport , heat, gas and water supply patentUsing a unique patented technologyNatural monopolies are producing high-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.