could you reply to this essay The week in microeconomics week discussed governme
ID: 1213709 • Letter: C
Question
could you reply to this essay
The week in microeconomics week discussed government and product markets, covering antitrust and regulation, and market failure for example externalities, public goods, and asymmetric information. For this week’s discussion, the events between US Airways and American Airline merger would not make the airline industry a monopoly. Some experts would say that the US airline industry is more of an oligopoly (http://www.investopedia.com/, 2016). In an oligopoly market there are a small number of relatively large firms that produce similar, but slightly different products. With this there are significant barriers to entry for other enterprises. Meanwhile, in a monopoly, the seller charges high prices for the goods because there is no competition. Traditionally, a monopoly is identified by a single seller and a competition is the result by which the organization has rivals. A competition provides the consumers with a wide selection of choices, at lower prices and could even result in better customer service. Meanwhile monopolies are the complete opposite. For me, I cannot come to a final decision of decided which is worse a monopoly or competition. They both are derived from, what type of market industry an organization is in and all the develop state of the economy, and based on what services are to be provided. Essentially monopolies and completion is a direct result of the supply and demand available for a local good, product, or service.
Explanation / Answer
Oligopoly market is better than the monopoly because under oligopoly their is competition among firms which reduces the market price of the product and resulted in consumer surplus. On the other hand, monopoly is a form of market where there is only a single seller who have full control over the price and its main aim is to earn maximum profit. Monopoly earns profit by transferring consumer surplus in favour of himself by practising price discrimination. So, from society point of view, monopoy is worse as compared to competition.
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