![]() ![]() Monopolies are illegal because of the following reasons: In a market an individual's power to control the market is generated by specific sources. They do this either by increasing the prices of their products and services in the market or expanding their production scales. Profit maximizer: The motive that guides monopolists is revenue maximization.In this type of market, one business entity is the sole producer of all the output for a good or service. It means that a single business entity is the same as the market it serves. Single seller: A monopoly market is always served by one seller.Generally, price changes are always as a result of market conditions. For instance, if the demand for a given product increases, the monopolists are likely to revise the price of that particular product upwards. Price discrimination: In a monopoly market, sellers are at liberty to change prices and quantity their products and services at any given time.The restrictions ensure that monopolists do not face any competition and that they continue to enjoy control over the market. There are regulations that restrict the entry of new firms into a monopoly market. High barriers to entry: A monopoly is also characterized by barriers to market entry.In other words, they are price setters, and consumers are usually at their mercy. ![]()
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