Economics Assignment Essay Example | Topics and Well Written Essays - 2250 words

Economics Assignment - audition ExampleBased on the fact that within the market place the root of everything litereally comes down to try and demand, this is altered by monopolistic practices and therefore society tends to disfavor monopolies as practicing on an unfair basis, and creating barriers of entranceway to firms wishing to enter the market for profit generation, as well as from the perspective of the consumer, being that the monopoly is below the belt regulating prices, by restricting output and therefore is extracting a price without allowing market forces to determine the decry supply and demand balance of the given commodity. Essentially when dealing with a monopoly consumers ar at the blessing of the price determination of that monopoly, which they control via total output restriction and subsequent economic welf ar reduction.The monopoly comes to the highest degree when there is little or no competition, normally the latter. The monopoly will always persist based on the barriers to entry for any rival company or concern attempting to enter the market place. Barriers to entry cheer a monopoly and at times can even be state sponsored, via lawful framework or even finance. The barriers to entry for rival firms includeLegal Ba... Legal Barriers - these take the form of legal framework where a government will only allow a producer to supply a product, for interpreter if one considers the first class mail deliver in the United States which USPS is the only allowed deliverer.Patents - similar to legal barriers due to the legal framework that will support a holder of a patent, although this issue is elusive around the cost of research and development in the patent creation process. A certain crop of thought agreeing with the patent barrier, claims government encouraged innovation incentive, whilst others will claim consumer deprivation due to profuse price fixing. Examples would be the pharmaceutical companies that hold patents on medical dr ugs, Pfizer who manufactures Viagra - they are the patent holders and are therefore the only company entitled to produce and sell the drug.Control of strategic resources - this would entail a holder of mineral rights or mining rights of a commodity that must be present in order to produce the end product. An example is De Beers controlling 90% of the worlds diamond production (Wessels, W.J).Natural Barriers - likewise called economies of scale. This is related to the mere cost of establishment within a given industry. It is too expensive and swell intensive to enter the market on a profitable basis. An example of this would be the various service program companies in any given economy.One can safely deduce that monopolies will continue to exist, as long as there aregovernments who sponsor such activity, as well as when companies are in the position to be able to create a barrier to entry, via market power or anti competitive behavior, this in turn can be negated by anti trust co nvention or competition law.The Economists vs. The