Question

Read and analyze the response below. What do you think? Explain. do you agree? why or why not? (5 Sentences Minimum)

A monopoly alludes to a segment or industry ruled by one enterprise, firm or element. Monopolies can be viewed as an extraordinary consequence of free-market private enterprise in that missing any limitation or restrictions, a solitary organization or gathering turns out to be sufficiently huge to claim all or almost the majority of the market (merchandise, supplies, foundation and resources) for a particular type of product or service. A patent is a type of intellectual innovation. A patent gives its proprietor the direct to avoid others from making, utilizing, moving, and bringing in a creation for a constrained timeframe, typically twenty years. The patent rights are granted in exchange for an enabling public disclosure of the invention. In many countries patent rights fall under common law and the patent holder needs to sue somebody encroaching the patent so as to authorize his or her rights. In a few businesses’ licenses are a fundamental type of upper hand; in others they are unimportant. The definition of the grafting process. Graft, in agriculture, the alliance of plant parts by methods for tissue recovery. Grafting is the demonstration of setting a bit of one plant (bud or scion) into or on a stem, root, or part of another (stock) so that an association will be framed, and the partners will keep on growing. The part of the combination that gives the root is known as the stock; the additional piece is known as the scion. At the point when multiple parts are included, the centerpiece is known as the interstock. At the point when the scion comprises of a single bud, the procedure is called budding. The Ecke family was able to establish a monopoly on the production of poinsettia by being shrouded about the grafting procedure. The family wishes to have power over the production and pricing of poinsettia. Because of a monopolist's power over key crude materials and techniques for production, it is less demanding for them to charge high prices for their products. Access to specific knowledge of production processes enables monopolists to set high prices while maintaining profitable margins. In the given inquiry, the publicizing of the grafting procedure in a journal would surely have influenced offers of the Ecke privately-run company since the uniting procedure went under open space, hurting the monopoly the Ecke family prior had. Presently, competitors would have a superior shot of entering the poinsettia business. If they manage to copy the grafting process efficiently, the Ecke family would have to restrategize and probably set competitive prices if competition increases. In any case, the Ecke family could opt for patenting its unique grafting process and save itself from potential threats in the future. A patent gives the proprietor sole expert over its creation and brings the utilization of the creation by a third party under law. the monopolist loses his business advantage, since other firms now have access to the same production process. As more and more firms replicate the production process, they can produce at a lower cost, and as a result market supply rises at the expense of the individual firm's output (market share). Higher market supply will reduce the price of poinsettias. This way the Ecke family would be able to continue its monopoly over poinsettias.

Answer 1

Monopolistic competition is generally referred to as a mixture of pure competition and monopoly.

It consists of many sellers selling to many buyers, but differentiated products. The products are not completely substitutable with each other as they differ in ingredients, service type, packaging, advertising etc. They operate with the purpose of profit maximization and set prices at the point MR=MC. They have few entry/exit barriers and earn zero economic profits in the lnog run.

Coming to PC and monopoly, a perfectly competitive market consists of many sellers selling to many buyers the same product at same market price. Firms have 0 market power and operate for welfare maxmization by setting P=MC. Firms earn zero economic profits in both short and long run. Also, there are no entry/exit barriers.

A monopoly firm is the single most seller in the market selling a product (not easily substitutable) to a large number of buyers. The firm makes high barriers to entry so as to avoid competition. It has complete control over the market and operates for profit maximization purpose by setting MR=MC