Notice: Payments for answers will end 4/10/2017. Click for more info.
You have new items in your feed. Click to view.
Question and answer
Q: In 3 or 4 sentences, explain why prices decrease when a market moves from a monopoly to perfect competition.
A: Economists assume that there are a number of different buyers and sellers in the marketplace. This means that we have competition in the market, which allows price to change in response to changes in supply and demand. [ Furthermore, for almost every product there are substitutes, so if one product becomes too expensive, a buyer can choose a cheaper substitute instead. In a market with many
buyers and sellers, both the consumer and the supplier have equal ability to influence price. In some industries, there are no substitutes and there is no competition. In a market that has only one or few suppliers of a good or service, the producer(s) can control price, meaning that a consumer does not have choice, cannot maximize his or her total utility and has have very little influence over the price of goods. A monopoly is a market structure in which there is only one producer/seller for a product. In other words, the single business is the industry. Entry into such a market is restricted due to high costs or other impediments, which may be economic, social or political. For instance, a government can create a monopoly over an industry that it wants to control, such as electricity. Another reason for the barriers against entry into a monopolistic industry is that oftentimes, one entity has the exclusive rights to a natural resource. For example, in Saudi Arabia the government has sole control over the oil industry. A monopoly may also form when a company has a copyright or patent that prevents others from entering the market. Pfizer, for instance, had a patent on Viagra. ]
Expert answered|jeffreymcmillan|Points 100|
Question
Asked 6/24/2013 11:22:06 AM
0 Answers/Comments
Get an answer
New answers
Rating

There are no new answers.

Comments

There are no comments.

Add an answer or comment
Log in or sign up first.
26,580,665 questions answered
Popular Conversations
Which term refers to the process by which volcanoes release carbon ...
Weegy: The term D refers to the process by wich volcanoes release carbon dioxide.
1/12/2018 12:11:58 PM| 2 Answers
Solve this equation: 2s + s + 12 = 132. A. s = 120 B. s ...
Weegy: 2s + s + 12 = 132 User: Simplify this expression: 13 + (–12) – (–5) = ? A. –6 B. 6 C. –30 ...
1/14/2018 6:19:10 AM| 2 Answers
A binomial consists of _______ terms. A. 2 B. 3 C. 1 ...
Weegy: A binomial consists of two terms. User: Which of the following is a monomial? A. 2 + xyz B. 2x + ...
1/14/2018 6:22:47 AM| 2 Answers
If two angles are supplementary and one of them is 30°, what is the ...
Weegy: Two angles are supplementary. The first angle measures 60 . The measurement of the second angles is 120 . ...
1/14/2018 6:48:01 AM| 2 Answers
Simplify this expression: 19 – (–8) – (–14) = ? A. 25 ...
Weegy: 19 ? (?8) ? (?14)
1/15/2018 10:29:20 PM| 2 Answers
Which unit do astronomers use for angular ...
1/18/2018 7:10:19 PM| 2 Answers
Which of the following is an example of a long-term climatic change? ...
Weegy: Ice age is an example of a long-term climatic change. User: In what times of year are tropical cyclones most ...
1/18/2018 8:30:25 PM| 2 Answers
3x = -39
Weegy: 3x = -39; User: All of the following were innovations that benefited farmers during the Second Agricultural ...
1/19/2018 1:53:25 PM| 2 Answers
Weegy Stuff
S
L
R
Points 633 [Total 925] Ratings 2 Comments 613 Invitations 0 Offline
S
L
Points 121 [Total 4572] Ratings 0 Comments 61 Invitations 6 Offline
S
P
L
P
Points 70 [Total 188] Ratings 0 Comments 70 Invitations 0 Offline
S
Points 17 [Total 17] Ratings 0 Comments 17 Invitations 0 Offline
S
Points 12 [Total 12] Ratings 0 Comments 12 Invitations 0 Offline
S
Points 10 [Total 10] Ratings 0 Comments 0 Invitations 1 Offline
S
P
Points 5 [Total 44] Ratings 0 Comments 5 Invitations 0 Offline
S
Points 3 [Total 3] Ratings 0 Comments 3 Invitations 0 Offline
S
Points 1 [Total 2] Ratings 0 Comments 1 Invitations 0 Offline
S
Points 1 [Total 1] Ratings 0 Comments 1 Invitations 0 Offline
* Excludes moderators and previous
winners (Include)
Home | Contact | Blog | About | Terms | Privacy | © Purple Inc.