Principles And Applications Of Economics (microeconimics)

What are the causes and consequences of monopoly ? Why do economists recommend pro-competition policies The virtually key definition of a monopoly is a plastered which exists alone in the entire exertion . However , it depends on how narrowly the manufacturing is defined - what matters is how much power the monopoly holds varying with the amount of substitutes structural in the market by rival sures (Friedman , 2002 . For example , a cafeteria owner has monopoly in a university , but does not binge a monopoly in the entire vicinity .

Like any(prenominal) new(prenominal) thing , there are two sides to monopolies - it has its advantages and disadvantagesBARRIERS TO ENTRYThe most patent property of a monopoly is the obstacles to entry which are the blockages and obstacles for bleak firms for entrance the industry Barriers to entry include factors such as economies of plateful this is the reduction of cost per unit as the take incur of harvest-feastion increases Since monopolies are the only firms in their respective industries , they clear up the entire market demand (Grant , 2002 . To supply for that , the production train is huge which gives the firm an economies of scale unlike other smashing firms who produce only a small amount . as well as , the cost of production for an established firm is always freeze off than a new firm because the new firm call for to make many expenses in front it can settle raft properly in the marketAnother barrier to entry is produ! ct specialism which is a clear trait of one company s product it...If you want to get a full essay, order it on our website: OrderCustomPaper.com

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