Monopoly essay Essay

Monopoly is a slopped that can visit the marketplace price of a veracious. In the fundamental case, a monopoly is the scarcely seller of a good or service. (Miller 103) Characteristics of a Monopoly. Are that in that respect is unitary single seller in the market with no opposition and there are many buyers in the market. The seller controls the prices of the goods or services and is the price nobleman as well. The consumers do not drive home unadulterated information on the goods or services. Advantages of a Monopoly.The Monopolies avoids duplications and thusly wastage of resources. Enjoys economics of scale, due to it being the only supplier of the product or service in the market, put one acrosss many clams and be used for research and breeding to maintain their status as a monopoly. They as well use price discrimination to benefit the weaker economic section of society. To avoid competition, they can afford to institutionalise in the latest technology and mac hinery. Disadvantages of a Monopoly.Monopolies have poor levels of service, there is no consumer sovereignty, the consumers are charged high prices for such low quality goods, and lack of competition could lead to low quality goods, as well as out dated goods. What is demand for a monopoly to earn pull aheads in the gigantic run? First off, any market quality can see super normal profits in the short-run. What is more important is what happens in the keen-sighted-run. axenic monopolies are not the only monopoly that can afford profits.Natural Monopoly or a price acuate monopoly can make profits as well. The only difference between them is why they are monopolies to fix with. Oligopolies are not monopolies, although they do tend to make above normal profits. Monopolistic competition does not yield 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 hearty uses economies of scale then I would be lecture about a natural monopoly (or a hardly a(prenominal) firms in oligopoly depending on how enlarged or wee the minimum efficient scale is). If the MES were small, economies of scale would not be an creation 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 noncompetitiveally 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 nothing more or less than a normal profit. (http//www. amosweb. com/cgi-bin/awb_nav. pl? s=wpd&c=dsp&k=monopolistic+competition, +long run+ product+analysis).Works Cited Roger LeRoy Miller. eco nomic science 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.