Monopoly term paper Essay

Monopoly is a market structure containing a single firm that produces a unique good with no close substitutes. It controls supply of a good or service. It is where the entry of hot producers is prevented or highly restricted. According to the Business Dictionary, monopolist firms keep the price high and restrict the output, and presentation little or no responsiveness to the needs of their customers. Most governments try to control monopolies by oblige price controls, taking over their ownership (nationalization), or breaking them up into two or much competing firms.Monopolies exist in varying degrees (degrees (due to copyrights, patents, access to materials, exclusive technologies, or unfair trade practices) almost no firm has a complete monopoly in the era of globalization. So we provide see the problem of monopoly is that it can embed a high price than borderline cost. The fact that a monopoly does not face the rectify of competition means that the monopoly may operate in efficiently without being corrected by the marketplace. An example for monopoly aptitude be Comcast. If Comcast were the only cable television provider in your area. If you want cable, you have no resource but to go to Comcast.And because of this, they can charge any price they want. Other local electric condition company, campus bookstore or local telephone service might be local monopolies as well. George J. Stigler, handler of the Center for the Study of The Economy and the state, professor of economics at the University of Chicago states that a monopoly is free to set any price it chooses and will usually set the price that yields the largest possible profit. There are lead problems that often associated with a market controlled totally by a single firm such as inefficiency, inequity and political abuse (AmosWEB Encyclonomic).Inefficiency is the most noted problem in monopoly. A monopoly charges a higher price and produces slight output than perfect competition. Also, the p rice charged by the monopoly is always greater than the marginal cost of production. Income inequality is another problem of monopoly. Monopoly earns economic profit, consumer surplus is transferred from buyers to the monopoly. So buyers end up with less income, and the monopoly ends up with more. Monopoly is able to maintain single-seller status and market control, income continues to be transferred from buyers to the monopoly and to the monopoly resource owners.