Monopoly essay Essay

Monopoly is a trusty that open fire determine the market bell of a dandy. In the extreme case, a monopoly is the merely trafficker of a good or service. (Miller 103) Characteristics of a Monopoly. Are that t here is wizard single seller in the market with no controversy and there atomic number 18 many a(prenominal) buyers in the market. The seller controls the expenses of the goods or services and is the price maker as well. The consumers do not invite perfect information on the goods or services. Advantages of a Monopoly.The Monopolies avoids duplications and hence wastage of resources. Enjoys stintings of collection plate, repayable to it being the single supplier of the merchandise or service in the market, makes many salary and be used for authoriseigate and development to maintain their status as a monopoly. They also use price discrimination to benefit the weaker economic portion of society. To avoid competition, they backside afford to invest in the l atest technology and machinery. Disadvantages of a Monopoly.Monopolies have poor levels of service, there is no consumer sovereignty, the consumers are charged high prices for much(prenominal) low quality goods, and lack of competition could lead to low quality goods, as well as out go out goods. What is required for a monopoly to earn moolah in the presbyopic run? number 1 off, any market type can see super habitual make headways in the short-run. What is more important is what happens in the long haul. Pure monopolies are not the only monopoly that can make net incomes.Natural Monopoly or a price discriminating monopoly can make profits as well. The only difference between them is why they are monopolies to begin with. Oligopolies are not monopolies, although they do tend to make above normal profits. Monopolistic competition does not throw these types of profits in the long-run. Economic profit goes to zero here in the long-run because there is a lack of barriers here to prevent competition from entering (as there is with perfect competition).If a firm uses economies of scale then I would be public lecture about a natural monopoly (or a few firms in oligopoly depending on how abundant or small the minimum cost-efficient scale is). If the MES were small, economies of scale would not be an entry barrier to competition in order to achieve positive economic profits. If the MES were large, large enough to support one firm only, that would be the definition of a natural monopoly. In the long run, a monopolistically competitive firm adjusts plant size, or the quantity of capital, to maximize long-run profit.In addition, the entry and exit of firms into and out of a monopolistically competitive market eliminates economic profit and guarantees that each monopolistically competitive firm earns cryptograph more or less than a normal profit. (http//www. amosweb. com/cgi-bin/awb_nav. pl? s=wpd& group Ac=dsp&k=monopolistic+competition, +long run+ proceed s+analysis).Works Cited Roger LeRoy Miller. economics Today, Sixteenth Edition. Boston, MA Pearson Education, Inc. , publishing as Addison-Wesley, 2012, 2011, 2010, 2008, 2006. http//www. amosweb. com/cgi-bin/awb_nav. pl? s=wpd&c=dsp&k=monopolistic+competition,+long-run+production+analysis.