Monopoly Questions and Answers

QUESTIONS RELATED TO MONOPOLY 1-What is the characteristic of the monopoly? 1 The existence of a single merchandise of the commodity 2 characterized by tolls, rising prices prevailing 3 the relative stability of prices 4 in that location are barriers to enter the industry monopolist 5 non bring to advertise Another Monopoly properties. comprise control. In a monopoly, and at the personify of supply in the market one entity to control and demand, and the degree of the price offered and the control exercised by the institution or individual is greater. Predatory pricing. This feature article of the advantages of a monopoly consumers.These are short term market gains when prices dropped to meet the demand of rare product. Suppliers and consumers directly benefit from an attempt to monopolize the company to gain the sale of business trade. Price flexibility With regard to the demand for the product or service offered by the company monopoly or individual, and is dictate d by the price elasti city of the ratio of the inviolate value of the increase in prices and demand in the market. Lack of creativity At the expense of absolute control of the market, and monopolies display a tendency to lose efficiency everyplace a period of time.With one product lifetime, and innovative design and marketing techniques rear seat. Lack of competition. When the market was designed to serve the monopoly and the lack of moneymaking(prenominal) competition or the lack of goods and viable products shrinking the scope of ideal competition. 2-How monopoly arises Monopoly arises in a variety of circumstances there are types of goods and a service does not accept by its nature, or not in the public interest to multiple producers, its called natural monopolies, for example to provide the city with water, electricity, or the trains running between two countries.Often assume the state or municipal authorities to manage these services, or to grant a assignment to a private company, subject to strict control. Monopoly may arise in an industry, the growth of a project, and it seized on other projects. Or as a result of grab or merge of small projects in the large-scale project, Monopoly May arise collectable to agreement between the projects owners in a particular industry to determine the price, or divide markets among themselves, known as (cartel), and in this case there are a number of producers, much(prenominal) agreement among them makes them a monopoly power.Most of the countries have been working on the subject of monopolies control. 3-How we bay window regulate the monopoly Pricing at bare(a) cost Economists have for many decades argued the benefits of setting public utility tariffs on the basis of marginal cost. This glance is expressed in many classic economic texts on rule. Price discrimination One common objection to marginal-cost pricing is that, in the strawman of economies of scale, a simple linear price equal to marginal cost wou ld not llow the regulated firm to re inter sufficient revenue to cover its total costs. Ramsey pricing In those cases where the regulator is unable to set the marginal price for each service equal to its marginal cost, economic theory still places central emphasis on reducing the deadweight loss. Incremental cost The deadweight-loss hypothesis has a hard time explaining why regulators fail to keep an eye on policies which are efficient under the conventional economic theory, such as Ramsey pricing. Price / service stabilityAnother puzzle for the conventional economic approach to regulation is the heavy emphasis on price stability. There is a plentiful amount of evidence that price and service stability is one of the native concerns of regulators. Alternative regulation To encourage the productive efficiency of the monopolist. To eliminate the fillip to waste resources seeking to obtain a position of monopoly. To protect the change posture investment of the monopolist 4-Give some examples of monopoly type of monopolyThe main characteristicexamplesNaturalAccess to rare and not easily reproducible elements of workMonopolies operating in the sphere of production is mineral deposits of strategic importance for the national economy technologicalFeature production in this engine room is not enough consumer demand to support many competitive firmsEnterprise for the production of specific goods, such as infrastructure for the operation of natural monopolies GeographicCompetition due to the non-rationality of the territorial limited due to the effect of geographic barriersPublic ransport companies infrastructureInfrastructure network a network that supply products between distant from each other (both in space and in time), economic agentsBackbone enterprises in energy, rail transport , heat, plash and water supply patentUsing a unique patented technologyNatural monopolies are producing advanced products, such as medicine StateMarkets related to the exclusi ve jurisdiction of the stateDefense, aeronautics administrative commandOperating in a command systemNatural monopolies in the administrative-command system