Wednesday, October 9, 2019
Monopoly & monopolistic Essay
There are plenty of companies in America today that are controlled by a monopolistic market. Although there may be a few that are controlled as a monopoly market, while there are a few that are out there such as the Gas and Electric Company, SDG&E and the USPS. It can be difficult when you are going from a monopolistic firm to a monopoly only because the market is completely different from one another. When it comes to Wonks, there are plenty of beneficiaries when we analyze the differences of going from one to another. It is uncommon that a firm will go to a monopoly after being a monopolistic company. But as we dig deeper there can be some advantages as with anything there are disadvantages to the government, companies and society. As stated in our text the definition of the monopolistic is as follows, Ã¢â¬Å"A common form of industry (market) structure in the United States, characterized by a large number of firms, no barriers to entry, and product differentiationÃ¢â¬ (Case, pg. 304). When we look at a monopolistic company indicates that there are multiple types of the same type or similar companies that create the same product(s). This tends to be a common theme here in America. Wonks changed to a monopoly firm which resulted in Ã¢â¬Å"Ã¢â¬Å"An industry with a single firm that produces a product for which there are no close substitutes and in which significant barriers to entry prevent other firms from entering the industry to compete for profitsÃ¢â¬ (Case, pg. 262). In a monopoly firm there is one main firm that manufactures the product and nobody else can replicate the product. Looking on the brighter side, there are plenty of advantages to having a monopoly company that could be beneficial for the government, other companies as well as customers. The government usually looks at a firm that is considered a monopoly and they are the ones who allow the sense of control over the company. They are able to come in the market as a monopoly with in fact this will allow for them to regulate the competition. For a company there are benefits as well to being a monopoly company. It requires for the company to have a huge amount of products on hand to make sure that they are meeting the customerÃ¢â¬â¢s needs. For a company to do that they would need to provide a bigger amount of capital in the production. This is because production cost takes a plunge simple fact that you are now producing in larger amounts. This may be a huge asset for a firm because it will now be lower in cost for the product to be produced. When we analyze price, the firm may have an option to increase or decrease the price depending on the situation. Since Wonk is the only company like itself, the customers have to pay the price that the company puts forth, or they have the choice of not purchasing their products. Lastly, for the customerÃ¢â¬â¢s standpoint, they have some advantages as well. A firm that tends to be as the monopoly firm can lower prices to get people in the door. Not always will the prices be low either. Now this is an advantage for one because now the consumer is getting the product at cheaper prices. When it comes to Wonks being a monopoly the government, companies as well as the customers can all benefit from it in one way or another. When looking at the two, a monopolistic and a monopoly firm the pricing and the producing for both are different. In this case the monopoly firms prices tend to be higher because they are the only company that manufactures the item or product. At any given time the company can increase and or decrease the prices when they want and the customers either can purchase the product or not at all. In a monopolistic company, their prices can differ from time to time given that there are many more companies with similar products. One thing to pay attention to is that not just one firm can change the prices because the customers can just simply go to another place to get a similar product at a cheaper price. For a monopoly company when it comes to producing product, it can be different to how prices are determined. For example, if the prices are lower, then more production is needed in order to keep up with consumer demands. We could also consider that the production may not change a whole lot in a monopoly because they are usually the only firm with that particular product. In this case if a customer wanted the item or product then they will pay whatever the manufacturer priced it out as. For a monopolistic company, production can change depending on the prices. If the companies prices happens to be high, consumers will not want to purchase items from this company. Customers do have a choice to shop around and go to another company. Some companies have particular market and target a certain group of individuals. This can be more beneficial to these types more than others. In my opinion, Wonks can benefit more from a monopoly. Considering my research, it appears that there are more opportunities for Wonks as a monopoly as oppose to a monopolistic firm. When a firm is part of a monopoly, they are able to control more of the sales to provide the necessary items for their consumers. A change with Wonks going from a monopolistic firm to a monopoly has many benefits. The government can benefit from Wonks by this firm being a monopoly simply because they are controlling the market. The company benefits and also they are able to reduce the amount of productivity cost because things are being produced in mass quantities. As for as the customers, they are able to get the product they need at a reasonably cheap price. A monopoly company can have some advantages when it comes to the economy if they have the put the consumers needs to make them happy customers. Reference: 1) Case, K. , Fair, R. , Oster, S. , (2009). Principles of Microeconomics, 9th Edition. Person Learning Solutions. Upper Saddle River, NJ.