The Various Shades Of Monopolies And Perfect Competition

1003 WordsFeb 20, 20175 Pages
The Various Shades of Monopolies and Perfect Competition Robert Sturdevant Embry-Riddle Aeronautical University Abstract Monopolies are always known to hold a limited amount of control over its particular market and that gives them the dominant ability to control the prices for its goods or services, or in other words, they represent the market. They indeed have detrimental effects on consumer and social welfare, which is why most do not agree with them. This paper is an attempt to address the various points of monopolies in a society of competition. Keywords: Monopoly, Perfect Competition, Price maker, Barriers The Various Shades of Monopolies and Perfect Competition The perfectly competitive firm is considered the price…show more content…
For this reason, a pure monopolistic company is not so intent on selling the most expensive product, but instead places their intent on maximizing their profits (McKenzie, 1998). To some extent, the pure monopolistic firm varies from just a monopolistic firm partly because of the number of competitors involved in a monopolistic venue which is less than one hundred. A monopolistic firm can be defined as a firm that has a relatively large number of firms, differentiated products which is promoted with heavy advertising, and easy entry/exit from the industry itself. Monopolistic competition consists of small market shares, meaning a firm has a relatively small percentage of the total market and limited control over the market price. Because of the fairly large number of firms involved confirms that no involvement by a certain group of firms can happen so there can be no restrictions on output of the products and a set price is unlikely and the involvement of several firms, each firm controls their own pricing without facing retribution from the other firms . This is quite a blatant difference between pure monopolistic firms being that pure monopolistic firms control the price and face no competition whatsoever in terms of products. Utility companies are considered to be pure monopolistic in nature. In Virginia Beach, Dominion Electric is the sole provider of electricity;
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