Week 8 Assignment 2

(7) A monopolist can discriminate prices for his product, a firm working under perfect competition cannot. The monopolist will be increasing his total profit by price discrimination if he find? Elastic ties of demand are different in different markets.

The purpose of antitrust policy is to promote competition, which leads to lower prices.  If a company had the power of price control that comes with being a monopoly, they would profit by picking the quantity/price that equals the highest revenue for their company.  This would be likely a lower quantity and higher price than would prevail if there was competition.

In this paper, you will read about the current standing of the U.S. economy as of spring and summer for 2015. Gross Domestic Product (GDP), unemployment rate, inflation rate, foreign trade, consumer spending, business investment, and government spending will all be analyzed. This analysis will then lead to the projection of the U.S. economy for the first two quarters of 2016.

Antitrust law is enacted by the federal and various state governments to (1) regulate trade and commerce by preventing unlawful restraints, price-fixing, and monopolies; (2) promote competition; and (3) encourage the production of quality goods and services with the primary goal of safeguarding public welfare by ensuring that consumer demands will be met by the manufacture and sale of goods at reasonable prices.

The US economy has recovered considerably from the great financial crisis of 2008. We are currently in the seventh year of expansion, and the overall performance of the economy has been satisfactory. Most economic indicators have improved dramatically, and some of them are at the best level since then. A significant recovery in home prices, GDP, labor market, stock markets, auto sales, and consumer spending have fostered the economic growth and restored the confidence of market participants.

Antitrust law is created to promote healthy completion, which eventually benefits the end users by ensuring the product & service prices remain low & affordable for most. It also helps build a better market, by ensuring open & free completion. In a freely existing market, every competing entity o business usually play by their rules, they would use attractions such as low price by cutting the already reduced prices or by increasing the level of their service or quality of the product .Fair practices , the profit opportunities and Competition also act as a stimulator for business. This stimulator helps business find innovative, new as well as more efficient methods of production. This also improves the overall quality.

Current US economic situation compared to five (5) years ago (interest rates, inflation, and unemployment)

The antitrust laws are basically competition laws that are aimed at protecting the consumers from predatory businesses out who may be out to defraud consumer and to limit the practice of free and fair competition in the market. The major objective of these laws was majorly meant to curb business practise vices such as price-fixing, bid-rigging, and market allocations.

The U.S. economy appears to be in upward swing following three consecutive quarters of weak GDP. Underpinning third quarter growth of 3.5% was robust consumption, which posted a 3% annual change. Expectations for the fourth quarter are for 1.9% growth, placing the yearly change at 1.6%. Although 2016 will match the weakest yearly growth rate since the financial crisis ended, the focus is clearly on the strength in the past two quarters and outlook over the next three years.

There has been a rise in the unemployment rate from 5% in 2008 to 8.2% in 2012. This shows that the economy of the country is not healthy (Heertje & Perlman, 2010). As it implies that industries are either unwilling to employ, or the power of the economy to absorb the existing workforce is low. The inflation rate has been declining over the past five years. The decline in inflation and increase, in unemployment, suggest that poor performance in an economy (Heertje & Perlman, 2010). Comparing with five years ago there is a high expansion of capital market in the united state than the general economic growth.

Three primary concerns about the US economy include the massive amounts of stimulus, the large number of unemployed from the last recession and the stock market rising to all time highs. These areas are interconnected with each other. As each one plays an important role in determining the underlying amounts of economic strength and the potential of the US seeing a longer term recovery.

According to the Congressional Budget Office, the "real GDP is expected to increase by 3.1% this year and 2.8% next year." This indicates slow, steady growth, and that the current GDP growth is in line with the expectations for this time period. The Federal Reserve has set an inflation target of 2%. This official target replaces an informal target that was understood to be in the 1.7-2.0% range (Spicer, 2012). The current rate of inflation is well below the target rate, despite increasing fuel prices.

The U.S economy has shown many signs of positive growth and development since last five years. As we know that U.S was suffering from recession in 2007-08, thereafter the economy went almost into a slump. The broadest measure of economic growth – GDP growth rate also fell at a very lowest point by 1% and came down to around 2.9% last year. It was the largest drop ever measured in the economic growth since World War II.

I’ll admit that before this semester I couldn’t tell you the difference between inflation and deflation or what economics was. My passion and interest was concentrated onto the medical field. Economics has become something of a challenge for me and I’m enjoying the process of learning what it is. I know that in 2007, we entered the Great Recession which we are still recovering from. The U.S. economy is something of uncertainty due to the change in supply and demand. I believe that the current U.S. economy kept its head above water due to the Government watching how much consumers were paying for products and the actual listed prices by producers. The U.S. economy might not be in a recession currently but we are still in a fragile state due to our liabilities exceeding our assets. It’s crazy to think that the current debt is $19,470,383,603,813.73 and growing. (http://www.usgovernmentdebt.us/)

“Managerial economics applies the principals and methods of economics to analyze problems faced by the management of a business, or other types of organizations and to help and to help find solutions that advance the best interests of such organizations.”(Managerial Economics, 2015). In order to apply the principals and methods of economics to business it is important to first understand general economic principles and macroeconomic indicators. These indicators help managers to understand how the economy is performing and what the trends are here in the U.S. and across the world. An article titled “Kiplinger’s Economic Outlook” presents a current look at general economic principles and economic indicators. The article offers a look at last year (2014) and uses the indicators to anticipate the economic performance for the U.S. in 2015 taking into account the political setting, legal issues, global economic pressures, and even climate change. The article discusses Gross Domestic Product (GDP), employment, Consumer Price Index (CPI), inflation and interest rates, Balance of Payments (BoP), and. major macroeconomic indicators for the U.S economy. The article also discusses economic principles including money, inflation, trade, supply and demand, and economic growth and how these will affect the economy in 2015. This article will allow the reader to enhance his or her understanding of macroeconomic indices, get an explanation of these indices using economic principles,