Monopoly essay Essay

Monopoly is a firm that sewer determine the commercialise legal injury of a good. In the extreme case, a monopoly is the barely seller of a good or work. (Miller 103) Characteristics of a Monopoly. ar that there is one single seller in the market with no rival and there are many buyers in the market. The seller controls the prices of the goods or services and is the price maker as well. The consumers do not pee perfect information on the goods or services. Advantages of a Monopoly.The Monopolies avoids duplications and hence wastage of resources. Enjoys political economy of scale, due to it being the only supplier of the product or service in the market, makes many profits and be used for research and victimization to maintain their status as a monopoly. They also use price discrimination to benefit the weaker economic section of society. To avoid competition, they can spend to invest in the latest technology and machinery. Disadvantages of a Monopoly.Monopolies have meas ly levels of service, there is no consumer sovereignty, the consumers are charged high prices for such first base quality goods, and lack of competition could lead to low quality goods, as well as out dated goods. What is required for a monopoly to make water profits in the long push? First off, any market type can see super normal profits in the short-run. What is more important is what happens in the long-run. Pure monopolies are not the only monopoly that can make profits.Natural Monopoly or a price astute monopoly can make profits as well. The only difference in the midst of them is why they are monopolies to begin with. Oligopolies are not monopolies, although they do melt to make above normal profits. Monopolistic competition does not impart these types of profits in the long-run. Economic profit goes to zero here in the long-run because there is a lack of prohibitions here to prevent competition from entering (as there is with perfect competition).If a firm uses econo mies of scale so I would be talking about a natural monopoly (or a few firms in oligopoly depending on how big(p) or small the stripped-down 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 limit size, or the quantity of capital, to maximize long-run profit.In addition, the entry and stall of firms into and out of a monopolistically competitive market eliminates economic profit and guarantees that for each one 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+production+analysis).Works Cited Roger LeRoy Miller. Economics Today, Sixteenth Edition. Boston, MA Pearson Educatio n, 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.