Policymakers in the government can respond to the monopoly problem by trying to make industries more competitive, regulating the behavior of monopolies, turning some private monopolies into public enterprises, or do nothing. Price discriminate means the exactly same product could sell to different consumers for different prices, even though the costs of producing for the products are the same. Price discrimination is impossible when product is sold in competitive markets. For a firm to price discriminate, it must have market power. There are three lessons to be learned about price discrimination are price discrimination rational strategy for a profit-maximizing monopolist, price discrimination requires the ability to separate customers according to their willingness to pay, price discrimination can reduce the inefficiency inherent in monopoly.
Capitalism is a liberal-market system: an economic system based on the private ownership of the means of production and distribution of goods, characterized by a free competitive market and motivation by profit. Capitalism has three essential features: 1. Private ownership- where individuals own land, machines, and factories. 2. Marketing competition- competing with one another, where the own decide what the price is and what product is produce.
The capitalist owned the means of production in capitalism and therefore basically were able to control the economy. Since one group is in power of the means this creates a huge gap of inequality. By controlling the means of production the capitalist were also able to form the relations of production. The relations of production are based on the owners and workers coming to an agreement on the terms of employment and the overall relationships between these two classes of people in general. According to Marx in Capitalism the bourgeoisie are motivated to accumulate as much profit as possible and the proletariat are trying to get as much money for their labor as possible.
A principle in which the suggestion is that the market should be proficient in providing society with all the goods and services that is needed. This should be done efficiently and through the markets relationship with the individual. Neo Liberalists believe that state interference could cause economic problems for its government as it offers a financial incentive without working, thus, delivering a pessimistic moral and social outcome (Powell and Hewitt, 2002). Additionally, there should be an emphasis on individual choice with a free market. With the choice of competition that the global market creates, there would be fewer restrictions on businesses to operate by the government.
According to the bizfinance.com, Capitalism and Socialism are political, economic and social systems in use by many countries around the world. In Capitalist system the means of production are owned by private individuals. That is to say, that main goal of such a system is maximizing profit for shareholders and partners. A good example of the Capitalists system is the United States of American where land and businesses etc are owned by private individual, but the Government interferes by putting in and enforcing necessary legislation to protect individuals. Competition between various businesses ensures a variety of goods and services to consumers, in a range of prices.
Executives are hired to act as fiduciary agents of their stockholders for the purpose of increasing wealth (Smith, 2003). He argued that CSR amounted to spending the stakeholder’s money that clouded decision making by reducing the firm’s focus on maximizing profits, thereby placing the firm at a competitive disadvantage (Smith, 2003). Friedman’s approach is practical and takes into account the interests of both firms and society. However, it is not realistic to think that a firm can separate business and social responsibilities. According to Mintzberg "the strategic decisions of large organizations inevitably involve social as well as economic consequences, inextricably intertwined...there is no such thing as a purely economic strategic decision."
They include; 1. Consumers are conceived as “homo economicus”: (a)Consumers are rationally maximise (b) Consumers perceive one another fundamentally in terms of impersonal markets. This Karl Marx has termed alienation. 2. Business organizations, workers and consumers have all the needed pertinent information. 3.
Explain the Law of Supply, the movements in supply, and assess why Businesses must utilize the elasticity of supply. Supply refers to the quantity of a good which producers are willing and able to offer for sale at a particular price. Individual supply discusses the quantity of a particular good offered for sale by a single seller, while market supply states the quantity of a particular good offered for sale by all sellers of a particular product. It is essential for businesses to utilize the elasticity of supply as it demonstrates how to increase output without a rise in cost or a time delay, whilst also highlighting the situations where it is difficult to change production in a given time period in response to a change in price of a particular product. The law of supply reflect the upward slopping movements along the supply curve due to a change in the price of the good.
Some of the key assumptions include slight government interference in the economy, consumers are able to make decisions because they are informed about the products they are looking to purchase and the price of the products and banks and laws exist for the sole purpose of easing commerce. The conclusions that can be drawn from the market capitalism model and how the business, government and society relationship are as follows; government regulation needs to be limited, corporate performance is measured in profits and the ethical duty of management is to make sure that the interests of the shareholders are met. In the market capitalism model, each individual has the power to own private property and freely risk these investments. The Dominance model can be described as the model where businesses and the government dominate (or control) the general populace. Within this model, the rich elite are the ones that control businesses at the expense of the average person.
However single sourcing can be devastating for a firm, worst scenario the firm would not receive any products. The supplier could also lack the capacity to meet the demand from the buying firm regarding such matters as quantity and quality. Multiple sourcing is more common when the firm seeks to enhance competition and flexibility. The cost will be reduced because of competition and the risk with not getting any products will be reduced. Also the buying firm will get more