Running Head : MONOPOLY[Writer s Name][Name of Institution] is such a model of tap structure , where thither is only one firm or company which produces and supplies the whole commercialize with a sure harvest-home . Therefore , in terms of monopoly , the accurate market or perseverance consists of only one producer . Pure monopoly female genitals hardly practically take place , but there are examples which are very oddment to monopoly . In accompanying , in many countries such services as natural gas water , telephone or early(a) rough-cut services are governmental monopolies .McConnell and Brue , the authors of famous Economics , chance upon out the following characteristics of monopoly (1 ) a single seller (2 ) no close substitutes of the production (3 ) monopolist can experience the cost for the product to a great extent (4 ) there are certain barriers to enter the market , like legal barriers (license , discernible , etc ) or possessing special unique resources , and so on (5 ) non-price rival , or producing standardized products (McConnell Brue , 2004 , 438-439Since a noncompetitive company represents the entire industry , the curve of its demand is identical to the curve of The discover of maximation of the profits (MR MC ) is valid for noncompetitive market . but , a monopolist does not try to derogate fair(a) be and has a tendency to lower the amount of the goods produced in to keep the prices higher .
This bring s to misallocation of the resources , so the! price in monopolistic market usually is higher than marginal costsPure monopoly is supposed to be not healthy for national economy beca phthisis it much ignores the rules of unaffectionate economic system (in contrast to pure rival , because there is no stimulus for a monopolist to perfect the use of the resources , improve the quality of goods or lower the costs . That is why in to limit possible abuse of monopolistic king governments have to regulate and keep under control monopolistic markets by imposing some taxes or creating other legislative barriers for monopolistsReferencesMcConnell , C .R Brue S .L (2004 ) Economics : Principles , Problems , and Policies . 16 ed . N .Y : McGraw-HillPAGEPAGE 2...If you want to get a full essay, grade it on our website: OrderCustomPaper.com
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