Question

 

1. Select 2 types of competitive markets: perfect competition, monopoly, monopolistic competition, oligopoly.

2. Explain selected 2 markets. Provide a table where you will compare characteristics. of each market, for example, how many companies operate in this market, are they selling the identical product, when are they maximizing their profit...etc..

3. Select 2 companies that are operating in each of these markets (one company per market). It can be global company or Uzbek company or combination of both. Provide detailed analysis of each company and how does it operate in this market. What are the benefits for the company? What are the benefits to the society or costs to the society? How is this type of competition in which the company operates influencing company's strategic decisions about prices, quantities, marketing, etc.

You essay must have at least 2 other sources in addition to the textbook. You must put all your references at the end of the essay.

You will be submitting this paper to Turnitin. So, your papers will be evaluated for plagiarism. You will be able to see the Turnitin report. If you see that the number is higher than 20% please revise your paper

Answer 1

1.perfect competition-

Perfect competition describes a market structure where competition is at its greatest possible level. To make it more clear, a market which exhibits the following characteristics in its structure is said to show perfect competition:

1.large number of buyers and sellers

2.homogenous product is produced by every film

3.free entry and exit of firms

4.zero advertising cost

5.consumers have perfect knowledge about the market and are well aware of any changes in the market.consumers indulge in rational decision making.

6.all the factors of production,viz. Labour,capital, etc, have perfect mobility in the market and are not hindered by any market factors or market forces.

7.no government intervention

8.no transportation costs

9.each film earns normal profits and no films can earn super-normal profits.

10.every firm is a price taker. It takes the price as decided by the forces of demand and supply. No firm can influence the price of the product.

A monopoly exists when a specific person or enterprise is the only supplier of a particular commodity.this contrasts with a monopsony which relates to a single entity's control of a market to purchase a good or service, and with oligopoly and duopoly which consists of a few sellers dominating a market. Monopolies are thus characterised by a lack of economic competition to produce the good or service, a lack of viable substitute goods, and the possibility of a high monopoly price well above the sellers marginal cost that leads to a high monopoly profit. The verb monopolies or monopolize refers to the process by which a company gains the ability to raise prices or exclude competitors. In economics, a monopoly is a business entity that has significant market power, that is, the power to charge overly high prices. Although monopolies may be big businesses, size is not a characteristic of a monopoly.a small business may still have the power to raise prices in a small industry.

1. A monopoly may also have monopsony control of a sector of a market. Likewise, a monopoly should be distinguished from a cartel, in which several providers act together to coordinate services,prices or sale of goods. Monopolies, monopsonies and oligopolies are all situations in which one or a few entities have market power and therefore interact with their customers, or suppliers in ways that distort the market.

   Features	Monopoly	Perfect competition
   1.description	Extreme market situation, where there is only seller. He has no competition and so controls supply and price.	A fair, direct competition between buyers and buyers: sellers and sellers; and finally between buyers and sellers.
   2.buyers and sellers	Only one seller and practically all buyers depend on him.hence he has absolute control over the market.	Large number of buyers and sellers. Hence no sellers or buyers can alter the price in the market.
   3.product	Homogeneous product.	Homogeneous product.
   4.price	Higher price higher than all competitive price P> MR=MC	normal price P=MR=MC
   5.Output	small output fixed by the sole seller.	Large output fixed by MR=MC
   6.profit	Excess profit monopoly	Normal profit realised by price competition.