Name that Monopolist We all can picture the classic monopolist. What are your im
ID: 1154517 • Letter: N
Question
Name that MonopolistWe all can picture the classic monopolist. What are your impressions of monopolists?
I would like to propose a game (pun intended).
Can you name a monopolist that exists that is not due to some sort of government privilege?
Remember, that the firm raises prices and restricts output. It is often accused of “predatory pricing,” or a theory that firms can eliminate their competition by producing a good below cost. Most companies accused of being “monopolists” actually increased supply and lowered prices, so keep that in mind as you try to find examples.
HINT: WALMART IS NOT A MONOPOLIST. There is a difference betweeen being a monopolist, which due to privilege can choose to produce at a HIGHER cost and LOWER output. WALMART sells goods at LOWER prices and HIGHER output than competitors. There is a difference in monopolists and those who win at competition.
Control of Monopolists
As the book notes, many monopolies controlled by the government are done so with price regulation. A price is set for all consumers who use that good.
Can you think of an example where that sort of control interferes with the market? I'll give a hint - can we utilize resources more efficiently by charging different prices? Perhaps we could see a reduction in overuse by charging more to some, and less to others? Name that Monopolist
We all can picture the classic monopolist. What are your impressions of monopolists?
I would like to propose a game (pun intended).
Can you name a monopolist that exists that is not due to some sort of government privilege?
Remember, that the firm raises prices and restricts output. It is often accused of “predatory pricing,” or a theory that firms can eliminate their competition by producing a good below cost. Most companies accused of being “monopolists” actually increased supply and lowered prices, so keep that in mind as you try to find examples.
HINT: WALMART IS NOT A MONOPOLIST. There is a difference betweeen being a monopolist, which due to privilege can choose to produce at a HIGHER cost and LOWER output. WALMART sells goods at LOWER prices and HIGHER output than competitors. There is a difference in monopolists and those who win at competition.
Control of Monopolists
As the book notes, many monopolies controlled by the government are done so with price regulation. A price is set for all consumers who use that good.
Can you think of an example where that sort of control interferes with the market? I'll give a hint - can we utilize resources more efficiently by charging different prices? Perhaps we could see a reduction in overuse by charging more to some, and less to others? Name that Monopolist
We all can picture the classic monopolist. What are your impressions of monopolists?
I would like to propose a game (pun intended).
Can you name a monopolist that exists that is not due to some sort of government privilege?
Remember, that the firm raises prices and restricts output. It is often accused of “predatory pricing,” or a theory that firms can eliminate their competition by producing a good below cost. Most companies accused of being “monopolists” actually increased supply and lowered prices, so keep that in mind as you try to find examples.
HINT: WALMART IS NOT A MONOPOLIST. There is a difference betweeen being a monopolist, which due to privilege can choose to produce at a HIGHER cost and LOWER output. WALMART sells goods at LOWER prices and HIGHER output than competitors. There is a difference in monopolists and those who win at competition.
Control of Monopolists
As the book notes, many monopolies controlled by the government are done so with price regulation. A price is set for all consumers who use that good.
Can you think of an example where that sort of control interferes with the market? I'll give a hint - can we utilize resources more efficiently by charging different prices? Perhaps we could see a reduction in overuse by charging more to some, and less to others?
Explanation / Answer
Ans
Microsoft is monopoly without Govt previlege
The example of control which interferes with market is price ceiling on electricity tariffs charged by power distribution companies. It Leds to more consumption of electricity and more inefficiency. It is better to charge domestic users more than industries because it leads to efficiency.
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