This website uses cookies to ensure you have the best experience. Learn more

"Monopoly Is Against The Interest Of The Consumer." To What Extent Do You Agree With This Statement And Why?

1388 words - 6 pages

Monopolies can be national (royal mail), regional (water companies) or local (petrol station). Unlike a perfect competition situation were firms are 'price takers' and only respond to consumer demand, a monopoly finds itself in an imperfect competition market. In this type of market the firm is more of a 'price maker' and can therefore influence the market price. When comparing monopoly and perfect competition under the same conditions, we can find that the monopolist when in equilibrium produces a lower output and sells it at a higher price than the perfectly competitive firm. Due to the fact that the monopolist holds down output and maintains a high price enables him to make supernormal profits that he can sustain as no other firms can enter the industry.A monopoly is a situation where the monopolist is the sole supplier or seller in the market. The monopolist can increase the price or restrict output of his product in order to increase sales revenue, as the demand curve is less elastic. This means that the monopolist faces the entire market demand curve for its output.There are several different types of monopoly:- A pure or absolute monopoly is basically a standard monopoly, meaning that there are no close substitutes in the market.- Technological monopolies involve monopolies were there are high capital costs such as in telecommunications.- Natural monopolies are when there is only room for one firm within the industry. There are two different types of natural monopoly; the first is the ownership of mineral resources, for example gold in South Africa, or oil in the North Sea. The second is the statutory monopolies established by governments such as the public utilities.- Lastly there are artificial monopolies, which are deliberately created by firms in order to make abnormal profits (surplus earnings to normal profit) such as takeovers, amalgamations, or cartels.The downward sloping demand curve for the industry must also be the demand curve for the firm. This gives the monopolist the power to be a price maker, he can set the price and then sell whatever quantity consumers are willing to buy at that price. Rather than setting the price, he can set the quantity he wishes to sell and then accept the price the market is willing to pay. It is because of this we say that the monopolist is constrained by the demand curve. Unlike perfect competition the monopolist is able to prevent new firms entering the industry by technical or statutory barriers. If the monopolist is making abnormal profits in the short term they are likely to persist in the long term. However the monopolist will not always make abnormal profits, as it will depend on the relationship between consumer demand (AR) and production costs.In the short run equilibrium there are only three possible outcomes for the monopolist, abnormal profits, normal profits or losses.Abnormal Profits (Average Revenue > Average Costs) (AR>AC)Normal Profits (AR=AC)Losses occur when the average...

Find Another Essay On "Monopoly is against the interest of the consumer." To what extent do you agree with this statement and why?

To Kill a Mockingbird - Harper Lee 'To Kill a Mockingbird is a book about courage'. To what extent do you agree with this statement?

961 words - 4 pages . When explaining this to Scout he states,"You might hear some ugly talk about it at school, but do one thing for me if you will: you just hold your head high and keep those fists down. No matter what anybody says to you, don't you let them get your goat Try fighting with your head for a change...It's a good one, even if it does resist learning". Pg 84Atticus without a doubt is the representation of courage itself. This courage is however, not only

"There is every Reason to Believe that Resources can be Developed Sustainably". To What extent do you Agree with this Statement?

758 words - 3 pages technology is also a contributing factor. The nations just simply do not have the appropriate technology, again, usually due to the lack of money, which is often due to corruption. However, there are signs that sustainable farming is now beginning to work in the LEDW, mainly due to modern, more efficient forms of irrigation. This is no better exemplified than in Egypt. There, they have come up with many new and innovative ideas for irrigation, such as

Education does not guarantee success in one's life. To what extent do you agree with this statement?

693 words - 3 pages is the action or process of educating or of being educated. It does not restrict an education to being a wholly academic process. This means that a person educated in music, sports or sewing counts towards having an education.Another question we must ask ourselves is what success really means. Is success measured in monetary terms, or in how wide your smile is when you get out of bed? Can someone really be happy living in a one-room flat occupied

Militarism within European countries was responsible for WWI. To what extent do you agree with this statement?

1839 words - 8 pages There are four factors which could be held accountable for World War I; militarism, alliances, imperialism and nationalism. Militarism is the expansion of armies and navies, alliances refer to the webs of pacts and agreements that countries made with each other, imperialism is the taking over of other countries, and nationalism is the promoting of one’s own country and propaganda against either other countries or countries which were opposition

“The recession has had devasting effects on UK businesses. Even long established companies have been unable to withstand the impact of the worst recession for 90 years.” To what extent do you agree...

1043 words - 4 pages Untitled "The recession has had devasting effects on UK businesses. Even long established companies have been unable to withstand the impact of the worst recession for 90 years." To what extent do you agree with this statement? (40 MARKS) In order to analyse the impact on businesses during the recession, we need to definite what is a recession in financial terms. A technical recession occurs when the level of real national

“The recession has had devasting effects on UK businesses. Even long established companies have been unable to withstand the impact of the worst recession for 90 years.” To what extent do you agree...

1043 words - 4 pages Untitled "The recession has had devasting effects on UK businesses. Even long established companies have been unable to withstand the impact of the worst recession for 90 years." To what extent do you agree with this statement? (40 MARKS) In order to analyse the impact on businesses during the recession, we need to definite what is a recession in financial terms. A technical recession occurs when the level of real national

“Each character in King Lear has control over their fate. The fates of each character are determined by events which occur in the opening scenes of the play.” To what extent do you agree with this...

1317 words - 5 pages "Each character in King Lear has control over their fate. The fates of each character are determined by events which occur in the opening scenes of the play."To what extent do you agree with this statement?Freewill and fate are themes which are frequently discussed in reference to Shakespeare's plays. He often makes the audience wonder whether the characters ever had a choice in how their stories would end. King Lear's decision to abdicate the

"the stock market is shortsighted, that it only cares about the next quarter's performance." do you agree or disagree with this statement and why?

1184 words - 5 pages value and so long-term dividends.The Short-sighted Stock marketFirstly looking at the market I agree with the statement "stock market is short-sighted, and that it only cares about the next quarter's performance." However I don't agree it should be a managerial complaint, in fact I would suggest that it is a very good datum check for the organisation to react strategically to the markets acceptance of the organisations activities and performance be

'After all, y'know, we're respectable citizens and not criminals.' To what extent do you agree with Gerald? How does the author lead us to challenge this assertion?

1521 words - 6 pages . Birling's account is one a very few number of legal crimes committed in the play.So as can be seen, each of the events led to another and another and finally it resulted in the death of an innocent lady called Eva Smith. The Birlings cannot be punished for this act by the law because they didn't do anything against the law except for Eric. But the only way that some punishment can be delivered would be if the details of the event leaked from one

Shylock in The Merchant of Venice by William Shakespeare, to what extent do you agree with the statement "Shylock is a two-dimensional villain who does not deserve our sympathy"

549 words - 2 pages Antonio and ridding himself of the grudge he had against him for a long time. Shylock is just like any other character in the Merchant of Venice with real motives for his actions and decisions.In conclusion, Shylock is actually a much underrated character and is only seen as one who does no good and only does harm to the many around him. However, no one stops to think that Shylock is the subject of the Christians' cruel jokes and insults. With this, we

The skills shortage is forcing organizations to change the way they utilize the skills of their older workforce. Do you agree or disagree with this statement

1403 words - 6 pages to respond to the changing environment. Skills shortages occur for a variety of reasons including; a strong economy with low rates of unemployment, growth of new industries with few ready-skilled tradespeople available, reduced interest in particular industries among potential job seekers, technology changes within an industry and so on (Department of Education, Employment and Workplace Relations, 2008).The Federal Government has given an extra

Similar Essays

"Dreams And Aspirations Feature Significantly In "The Caretaker." To What Extent Do You Agree With This Statement?

1339 words - 5 pages their daily life. This indicates that identity is elusive and shifting, that there are no fixed desires and goals in life.The use of non-verbal techniques also plays out how dreams and aspirations are rampant in the play. Material objects are used to prove his worth and therefore to achieve his aspirations. For example, in Davies' regarding the spotted shirt and striped shirt, he states "No, what I need, is a kind of a shirt with stripes, a good

'hitler's Charismatic Personality And Policies Only Partly Explain The Nazis' Rise To Power In 1933.' To What Extent Do You Agree With This Statement?

889 words - 4 pages charismatic he was. Many people also claim that if you listen to what Hitler said during his rallies and speeches, most of it is not very impressive. Without the propaganda and technology surrounding the Nazi campaign, they would not have gone very far. Although they should not be considered the chief factors in the party's growth, Hitler's appeal and policies were important to the Nazi rise.

"A Successful Economic Policy Was The Key Behind Hitler´S Maintenance Of Power In Germany." To What Extent Do You Agree With This Statement?

990 words - 4 pages Dunia Malezai "A successful economic policy was the key behind Hitler´s maintenance of power in Germany." - To what extent do you agree with this statement? Hitler maintained power in Germany through a number of different measures. The successful economic policy, however, was the most important of all. The economic chaos in Germany after the Wall Street Crash of 1929 and the overall economic instability of Weimar Germany was a perfect

"Dreamers Are Fool's, And Of Mice And Men Proves This" To What Extent, If Any, Do You Agree With This Statement?

1526 words - 6 pages "Dreamers are fool's, and Of Mice and Men proves this" To what extent, if any, do you agree with this statement?How can you define a fool? The word fool is most commonly mistaken as someone who is, idiotic, unintelligent, or stupid. But throughout the human race there are numbers upon numbers of intelligent fools. People do foolish things everyday; it is the nature of the human race. Mistakes are made, but they teach valuable lessons, and they