Question

Concepts: Monopoly, Natural Monopoly, Conglomerate Merger, Elasticity, Inelastic, Competitive Market, Oligopoly, Monopolistically Competitive Market,

Which concept that we will study will be most useful in my life as a consumer? Why?

Which concept that we will study could be most useful in my life as a voter on economic issues? Why?

Which issue in microeconomics is likely to unresolved after the course? That is: what will I still not understand well because microeconomics doesn’t have a very good answer? Why?

Answer 1

1.

It is the elasticity concept, that is most important from the point of view of consumers, because it helps consumers allocate funds to spend upon different avenues as well as consistently finding better and cheaper alternatives so that expenses are reduced. When a consumer finds different alternatives, then consumer can chose the cheap and best alternative so demand becomes elastic. If there is no alternative, then demand is inelastic in nature. So, elasticity is very important for consumers. It is the reason that elasticity is used as a base to make pricing decisions by the firms and government.

2.

Monopoly will be the useful concept, as a voter, because a voter wants competition in the market, and he or she would like monopoly to be converted into either regulated monopoly or there should be some other players as well so that voters as consumers get the benefits. If not, then monopoly is demand to exploit people in the short run and in the long run also if there is ano other alternatives.

3.

It is the concept that monopolistic firms earn zero economic profit, but in reality monopolistic firms warn profit in the long run as well. It is not explained by the economics. It is due to the reason that economics is based on assumptions and it does not consider monopolistic firms keep changing their products on a regular basis. So, they consistently earn profit. For example, Apple earns positive economic profit, as it regularly comes up with new models of iPhones, iPads, and MacBook. It makes them earn profit consistently.