Question and answer
In 3 or 4 sentences, explain why prices decrease when a market moves from a monopoly to perfect competition.
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 303 days ago|6/24/2013 11:22:06 AM
0 Answers/Comments
Ask a question
Not a good answer? Get an answer now. (FREE)
New answers
Rating

There are no new answers.

Comments

There are no comments.

Add an answer or comment
Log in or sign up first.
Questions asked by the same visitor
In 1 or 2 sentences, describe which is greater: gross pay or net pay.
Weegy: Answer: Answer: Gross pay is almost always greater than net pay, as net pay is after taxes, benefits, etc. Gross pay is what the company tells you that they will pay you. Net pay is what you actually take home. (More)
Question
All Categories|No Subcategories|Expert Answered
Asked 303 days ago|6/24/2013 7:17:57 AM
0 Answers/Comments
Home | Contact | Terms | Privacy | Social | ©2013 Purple Inc.
Ad
Popular Conversations
Solve the inequality 5x
Weegy: 5x User: Solve the inequality 5x Weegy: 5x User: Solve the inequality 12x Weegy: It will be c.x User: Solve the ...
4/23/2014 4:34:04 PM| 7 Answers
Simplify 5^-2 by making the exponent positive. A. 1/8 B. ...
Weegy: 5^-2 = B. 1/5^2
4/23/2014 8:59:53 PM| 4 Answers
Solve for x. x - 8 = -20 -28 -12 12 28
Weegy: 6(x - 2) = 4, 6x - 12 = 4, 6x = 4 + 12, 6x = 16, x = 16/6, or 8/3 in simplest form. User: The sum of ...
4/23/2014 1:27:55 PM| 3 Answers
Branches within the ICS organization can be established: ...
Weegy: Branches within the ICS organization can be established Geographically or functionally.
4/23/2014 5:48:09 PM| 3 Answers
5x + 4y + 15 + 2x - 8y - 5=
Weegy: The answer for 5x - 4y = 12 is y = 1/4 (5 x-12). User: 8(5a - b) - 6(4b-4a)= Weegy: a^2 - 5a - 6 = (a + ...
4/23/2014 8:09:04 PM| 3 Answers
Which country is not a permanent member of the U.N. Security ...
Weegy: the country which is not a permanent member of the UN council is (c) China. User: Who holds veto power in the ...
4/23/2014 10:11:57 AM| 2 Answers
Zeller, Inc., has 50,000 shares of stock outstanding. Zeller declares ...
Weegy: Zeller, Inc., has 60,000 shares of stock outstanding. Zeller declares a dividend of $580,000. ...
4/23/2014 10:05:10 AM| 2 Answers
What is the European Union?
4/23/2014 11:36:33 AM| 2 Answers
The United States and its allies launched operation “Desert Storm” in ...
Weegy: The United States and its allies launched operation “Desert Storm” in response to Iraq’s invasion of KUWAIT in ...
4/23/2014 11:50:36 AM| 2 Answers
Weegy Stuff
S
L
P
C
P
C
1
L
P
C
Points 1849 [Total 9730]| Ratings 0| Comments 1849| Invitations 0|Offline
S
L
P
C
L
P
C
Points 1846 [Total 7233]| Ratings 0| Comments 1846| Invitations 0|Offline
S
1
L
C
L
Points 941 [Total 5744]| Ratings 4| Comments 901| Invitations 0|Offline
S
1
L
1
L
P
Points 582 [Total 7259]| Ratings 2| Comments 562| Invitations 0|Offline
S
L
Points 480 [Total 2927]| Ratings 2| Comments 450| Invitations 1|Offline
S
L
1
1
1
Points 316 [Total 3582]| Ratings 7| Comments 246| Invitations 0|Offline
S
R
Points 267 [Total 379]| Ratings 6| Comments 187| Invitations 2|Offline
S
Points 218 [Total 218]| Ratings 6| Comments 138| Invitations 2|Offline
S
Points 170 [Total 586]| Ratings 0| Comments 170| Invitations 0|Offline
S
1
Points 165 [Total 495]| Ratings 4| Comments 125| Invitations 0|Offline