Monopoly and Competitiveness Research Paper Example | Topics and Well Written Essays - 1250 words

Monopoly and Competitiveness - Research Paper Example2. Competition- a perfectly competitive severe has no control on the competition as the admission and exit of untried firms is non restricted. bargonly a monopolist firm being dominant in its market can create entry barriers for new firms.3. Supply and engage curves- a perfectly competitive firm faces a horizontal demand curve and an upward sloping depict cure. While in the case of monopoly firm it faces a descending(prenominal) sloping demand curve and its supply curve is dependent on the fringy cost and marginal revenue (as seen in the graph below).4. Profit- maximizing output- a perfectly competitive firm maximizes its profit at the point where its marginal cost equals marginal revenue which in turn is equal to the equilibrium price. Whereas a monopoly firm maximizes its profit at the point where marginal revenue equals marginal cost and vertically locates the supply quantity on the demand curve (as seen in the graph be low).A2. Schumpeter has tried to elaborate and improve the exposition of monopoly. The term has been misinterpreted and misunderstood continually. It is regarded as a taboo which equals to oppression and savage exploitation of resources. But it is all-important(a) to understand that monopoly evolves mainly due to the large-scale structure of a business. This in turn is achieved by hard work and outstanding performance. Though he does not deny that there have been instances when the production is not improved despite the large-scale domination of the monopoly but this is not enough for backing up the common generalization associated with the term.According to him a single-seller position gained by either patent or monopolistic dodging can not be termed as exploitation as in most cases they are innovators. They stimulate in the new commodities and build their markets.In the case of perfect competition, where the market forces in equilibrium are disturbed by some external concomi tantor, then under old views it is assumed that the market itself reaches the new equilibrium. But in reality it might take the market farther than the new equilibrium than stabilise it. Another common notion about the perfectly competitive market is that, it is free of wastage of resources and inefficiencies. This in fact tumbles when considering the fact that a large-scale business can produce a similar product with the corresponding resources but with improved technology, quality, usability etc. and these are the reasons for why it charges a