The topic can be proposed by the writer Term Paper

The topic can be proposed by the writer - Term Paper Example However, in the contemporary market conditions, business affairs are highly complex in nature. There are many situations in the economy where few corporate firms in the industry possess extraordinary powers to manipulate the price and quantity supplied. These are situations when the resource apportion in the economy are not proficiently executed. The wastage of productive resources in the economy leads to social welfare dampening. Thus, for ensuring proper economic development in a nation, the economy must be guided by the Mixed Economic Principles. In such situations, the power and the antitrust practices of the private business organizations are controlled by the public authorities. This project would focus on the antitrust behavior of the famous multinational company of Microsoft in U.S. (Ross, â€Å"The Economic Theory of Agency: The Principal's Problem†). Monopoly Market In the theory of economics, a monopoly market structure is characterized with no competition in the ma rket. In this type of a market structure, there is only one seller in the market. On the other hand, the number of buyers in the industry is infinite. The single seller has the power to manipulate the market price of the product or service sold by him. The type of product or service sold by a monopoly seller in the market may be homogeneous or heterogeneous in nature. A monopoly seller is a profit maximizing agent in the industry. Figure 1: AR and MR Curve of a Monopoly Producer AR, MR Price or Average Revenue Curve (P or AR) Marginal Revenue Curve (MR) Quantity (Source: Authors Creation) The above diagram shows that the price or average revenue curve of a monopolist in the market is negatively sloped. The marginal revenue curve is also downward sloping for a monopolist. In the long run, a monopolist may enjoy normal (break-even) profit, supernormal profit or loss. A monopolist in the market discriminates among its consumers on the basis of the product prices charged to the customer s (Gravelle and Rees 145). Figure2: Price Discrimination (Source: Stole, â€Å"Price Discrimination and Imperfect Competition†) As shown in the above diagram, a monopolist may discriminate among its consumers on the basis of prices. In the above diagram, for the s=2 demand curve, the monopolist charges price p2 and it charges price p1 for the demand curve s=1. It may seem that a monopoly structure is a hypothetical market but by adopting special business strategies, a firm might become a natural monopolist in the industry. Figure 3: Natural Monopolist (Source: Tragakes 184) A single seller may grasp an entire share of market demand by taking the First Mover Advantage in business. By increasing the base of customers, the company may enjoy economies of scale in production. Scale economies in the long run would help the firm to minimize the average cost of production. In such a situation, it would be impossible for another firm to enter in the industry and sell products at such low average costs. Thus, a natural monopolist in the market enjoys scale in economies of production and prevents other firms from entering the industry. Figure 4: Welfare Loss in Monopoly (Source: Mankiw and Taylor 253) As stated in the above diagram, the efficient quantity of output is much more than the monopoly output threshold. On

Take home final exam Essay Example | Topics and Well Written Essays - 1000 words

Take home final exam - Essay Example The companies may opt to engage both the public and private investors in conducting out research on the occurring trends in the market and the market expectations from the companies to keep the competition real and be ahead of their competitors. The research will make them have hands-on information on the preferences of the customers thereby producing goods that meet their expectations (Mazzucato 76). Partnering with the correct stakeholders in trying to pull up together all the resources that are required to be ahead of their competitors is also another strategy of making sure that the companies are ahead in the market. The industries may end up employing the most qualified personnel and come up with a perfect marketing team that will sell the products of the company widely thereby surpassing the efforts of its competitors. Finally, the companies may try to focus on those programs that tend to encourage them to transform their basic and applied research into new products and manufacturing processes that lead to high-quality goods being produced for the customers (Mazzucato 56). During farmers production, profits and revenue should not be the only factor that the USA farmers should consider. These farmers should also consider factors like time, entrepreneurship and natural resources. During their production, farmers should consider entrepreneurship as a major factor of production. As entrepreneurs, the farmers should consider themselves as innovators and come up with new and improved ways to provide improved products to the market. They should decide on how their land, labor and capital should be used to make sure that they reap maximum profits from their farms. These benefits only accrue to the farmers and they, therefore, need to do many considerations during their production process (Uphoff 40). The farmers also need to put the issue of time in their considerations. The