Keywords: monopology release, monopoloy competition concept
Microeconomics is approximately economizing selections among alternatives uses of scarce resources. The options are made by the individuals. businesses, and federal government devices. Scarcity can be say as the central of the economical theory. Economic analysis is fundamentally about the maximization of leisure time, wealth, health, pleasure, these are all commonly reduced to the concept of utility subjects to constraints. These constraints or scarcity define a trade off. For instance, we can have significantly more money by working significantly harder, but less time because there are just so many hours per day, so time is a scarce. Microeconomics, which handles individual agents, such as households and business and macroeconomics that is definitely the economy all together, in which particular case it considered aggregate resource and demand for the money, capital and goods. In a nutshell, microeconomics is to review about the economics behavior of specific consumers, companies, and industries and the syndication of production and income included in this. It could be considers individuals both as supplier of labour and capital as the ultimate consumers of the final product. Beside that, it can be use to research both organizations both as suppliers of products and as consumers of labour and capital. Microeconomics also really helps to seek analyze the market or the types of mechanism that establish relative prices among the goods and services or allocates society's resources among their a variety of uses. Microeconomics is a very important knowledge in the analysis of financial theory, it includes both theoretical and functional implications. Microeconomics is a superb help that are reliable in taking care of the limited resources available in the united states and it is helpful to understand the work of the free enterprise economy where there is absolutely no central control. Microeconomics is the basis of welfare economics, it is used to create the monetary models for the better knowledge of the actual economical phenomena. Microeconomics also talks about how through market system goods and services stated in the community are distributed. Microeconomics is useful to explain increases in size from international trade, balance of repayments disequilibrium and the conviction of forex rate.
2. 0 Release to Monopoly
Monopoly is the marketplace structure that exist a single owner and a very massive amount buyers and retailing products that contain no close substitution and possess a very high access and exit hurdle. In our country, the example of monopoly market will be the TNB, Indah Drinking water, and Telekom Malaysia (TM Berhad). If people want a subscription home cell phone services they only can go directly to the Telekom Malaysia ( TM Berhad ), because Telekom Malaysia (TM Berhad ) is a monopoly. The term monopoly is a latin word, where 'mono' means sole and 'poly' means retailers. Monopoly have businesses that it's the only distributor on the market, and you will see no close replacement towards the result so monopoly haven't any treat of competition.
2. 1 Characteristics of Monopoly
There are some characteristics of monopoly market. Regarding to (www. economicsonline. co. uk) monopolies be capable of maintain an extremely normal profits in the long run. Much like all firms, income are maximized when Marginal Cost ( MC ) = Marginal Earnings (MR). In overall, the income level are well hinge upon the amount of the competition on the market, which for a 100 % pure monopoly is zero. With the earnings maximization, MC = MR, and the productivity is Q and the price is P. Given that the purchase price ( AR ) is above ATC at Q, supernormal earnings are possible ( area P, A, B, C ).
Super-normal-profits
Monopoly exists when there is merely one owner of a product. Monopoly is the organization that only are present on the market selling something that has no close substitution. Monopoly market is where the monopoly company operates. In a nutshell, there is absolutely no difference between a company and a business in monopoly as there is merely have one retailer. A monopolist is a cost maker, price machine are defined as firm which has the market capacity to control the prices. Since there is merely one seller or maker so they have got the power to manage the price tag on their products in the market. Monopoly company only sell product that does not have any close swap, so that consumers or buyers cannot find any substitute for the product that they might need. For example, electric source from our country can only just within TNB without any close substitute for it. Inside the monopoly market, there is also some strict obstacles to the access of new organization. Barriers to accessibility are likely natural or legal restrictions that restrict the entrance of new companies in to the industry because it is high cost to type in market that can support only 1 business example: TNB, Indah Drinking water and Telekom Berhad. So a monopolist faces no competition as a result of barriers of entry because other developer cannot compete with them due to they don't have the resource at their removal. Business in monopoly organization may contain the copyright because of its own product so that it will be illegitimate for other producer to duplicate its product. In short, barriers to entrance are made to stop potential entrants from going into market profitably because barriers to access are to safeguard the monopoly power of existing organizations and for that reason it keep up with the supernormal or unnatural profits in the long run. Advertising in monopoly market are rely upon the merchandise that the producer sold because if products are luxury goods such as imported car, then your monopoly needs some advertisement to market their goods so the consumers are prepared about it. Local public utilities such as water, electricity and home cellphone services do not require advertisement because consumers will know where to obtain it because there is merely one to get the products.
2. 2 Finish for Question 1
In conclusion, we've learned all about monopoly is market structure that is only single vendor and a sizable numbers of clients and products which may have no substitution. And in addition there's a very strict barrier of accessibility and leave to the monopoly market.
3. 0 Advantages to The perfect competition
Perfect competition is a type of market where there are large number of buyers and retailers, the retailers sell similar or homogeneous product. There is also free access and is available of the businesses. Both of the purchasers and vendors have perfect knowledge of the market.
3. 1 Characteristics of The perfect competition
There are some necessary conditions or requirements to become in a perfect competition market. Being with the perfect competition market, there is an important feature of perfect competition is the lifestyle of the large number of buyers and sellers. The market is so small compared to the overall industry where a single seller markets in the market. For example, in the poultry industry, there are a large number of duck makers in Malaysia and each firm produces only a small fraction of the total poultry industry. Another conditions for perfect competition market is that the firm must sell homogenous or standardized product because the purchasers do not identify the products of 1 seller to another seller. For instance, the potential buyers can't differentiate about the ducks that is advertising in the Company A and Firm B. Hence, the company can't fee different charges for the same product on the market. Once the purchasers spot the difference of the quality, packaging, coloring or design of different retailers, then this market is forget about in the condition of perfect competition market. Even the merchandise are similar but when there is a notable difference in terms of the packaging and quality then the product is not a homogenous or standardized product any further. Under the perfect competition market, there is no restriction on access of new businesses to the industry or leave of the companies from the industry. A firm can enter into the perfect competition easily and leave the perfect competition anytime if the firm wants. For example when he/she has the necessary factors of production like land, labour and capital then he/she can operate the business enterprise already. In the event the firm is suffering from deficits it can leave the industry without the regulations or constraints.
3. 2 Advantages to The monopolistic competition
Monopolistic competition is a market structure that have large numbers of small sellers selling differentiated products but these are close replacement products and also have a easy accessibility into and exit from the market. Compare to perfect competition, monopolistic competition market produce different and sold different but the goods are close substitutes for just one another. There are many products on earth represent monopolistic competition such as clothes, shoes, books and other items.
3. 3 Characteristics of this monopolistic competition
The characteristics of monopolistic competition market are quite similar with the perfect competition. Similar to perfect competition, there are many sellers and potential buyers under the monopolistic competition market. You will find large number of firms existing in the monopolistic competition market but it is less when compared with the perfect competition market. Because the size of the companies are small, there is no individual organization can influence the marketplace price. But, if each company in monopolistic competition market produces different or unique products they will have some control over the prices. Hence, each organization follows an independent price-output policy. For example, in wax industry, the costs of an 100ml wax range among brands such as gasby, mudwax, spiky and other businesses as well. Product differentiation means that the product in the organization is selling or producing are not similar. In monopolistic market competition, the organizations that producing the goods are different from its rival. Each seller will use different solutions to differentiate their product from other vendors to attract the customers and consumers. Product differentiation will gone through the product packaging, design, labeling, advertising and brand name. For example, if the organization sold eggs that is on view shelf, then your eggs will category in perfect competition market. If the firm packaged their egg in a packed box and called "Best Necessary protein Egg", then this egg is in the monopolistic competition market. In monopolistic competition market, there is no entry and exit barriers in monopolistic competition. However, the accessibility and exit into the monopolistic competition market is much less easy as the perfect competition market because of the products differentiation. If any new organizations that get into the industry, they need to find some differentiation with the existing brands. For example, if "Chicken A1" would like to enter in the soup industry, then the organization must find some difference in term of quality, style, labeling, and presentation to become in the monopolistic competition market. Within the monopolistic competition market, you will see stiff competition with other businesses for his or her products rather than for the price of the merchandise. Monopolistic competitive companies do not contend using the costs because of the products in the market are experiencing a lot of substitutes. So, the producers or vendors uses various solutions to attract the clients to buy their products. Types of non-price competition procedures in monopolistic competition market are advertisements, promotion, discounts, freebies, after-sales service and others.
3. 4 Release to The oligopoly
Oligopoly is the market structure that there are only a few enough firms advertising either standardized or differentiated products which is very restricted to enter the access and exit from the market. Under the market framework, some or all the organizations in the industry can earn unusual profits over time. This is as a result of admittance of new businesses is difficult or impossible. The oligopolistic organizations can impose obstacles to the accessibility in conditions of patents or access to a certain technology on the market. The purpose of it is to regulate excess the production of end result, which is unprofitable for the oligopolistic firms. The exemplory case of the oligopoly markets are cigarettes, automobiles, electro-mechanical equipment and cement.
3. 5 Characteristics from the oligopoly
The characteristics of oligopoly market are having few amounts of firms. Under oligopoly, the amount of businesses is small but the size of the businesses is large. The market share of every company that is large enough to dominate the whole market. Few businesses control the overall industry under oligopoly. But there is also no specific quantities to control the marketplace before becoming oligopolistic. The primary important criterion to become oligopolistic is to have shared interdependence between these firms. Under the situation like this, businesses will considered the reactions of its competitors in decision making to make strategic interdependence. There will be strong interdependence among all the firms in the oligopolistic market as the amount of the firms will become smaller. But if the range of the organizations become larger, then your interdependence between these firms will diminish. In oligopoly market, something that comes under oligopoly can be the homogeneous or a differentiated product. Example, concrete or electrical home appliances made by one firm are identical to some other firm. Organizations that is in oligopolistic market always consider the reaction of other firm rivals when both opting for price, sales concentrate on, advertising costs and other business policies. This is actually the important characteristic of an oligopoly organization that differs from other market constructions. Because of the number of organizations is small, changes in cost or outcome by one organization can have immediate influence on another firm. Beneath the situation of oligopolistic market, there are lots barriers to entry that is similar to monopoly. The oligopoly businesses have limited new entrants into the markets. The barriers are to regulate the certain resources, possession of patent and copyright, exclusive financial requirements and other legal obstacles. In a nutshell, large firms might take drastic actions in order to prevent the accessibility of new organizations by flooding the market. These large firms will produce the output at excess production capacity, which would drive the price down. Which means new companies that is recently set up will not endure because sometimes the purchase price are establish by these large firms is below the price price. Once the new companies are out of the market, the large firms will reduce the development capacity and boost the product price.
3. 6 Advantages to The monopoly
Monopoly is market structure where there is merely one firm on the market and there is absolutely no substitution to it. Monopoly employ a high accessibility and exit barrier since it is very high cost to get into a market that can support only one business. Monopoly is also a price maker, which has the market power to control the price.
3. 7 Characteristics from the monopoly
Monopoly is just the one seller of the merchandise. The monopoly organization would be the only firm industry that is providing product that has no close substitution whatsoever. This means consumers can only just find really the only firm that is offering the sole product, consumers could not find any replacement for the merchandise. Besides that, monopoly market employ a strict obstacles to the access of the new organization. Advertising in monopoly market is really depend on the product it sold. Normally general public resources such as normal water, electricity and home mobile phone services do not need advertisements because people will know where to go for the merchandise unless it is luxury goods like imported car then it will be needed advert to let consumers know about it.
