Wonks Potato Chip Company In a hypothetical scenario, involving the potato chip industry, there was an instance where the market structure was in monopolistic competitive market, also accompanied by long-run competitive equilibrium. However, after some time two individuals purchased all firms and created a monopoly called “Wonks.” As a result of this change there was modifications made in the industry. As monopolistic competition is defined as a form of industry that contains a large number of firms all competing with product differentiations (Case, Fair, & Oster, 2009). It becomes a whole new scenario when the industry becomes a monopoly. A monopoly is described as an industry in which one single firm produces a product with no close substitutes; in addition, their power prevents other firms from easily entering the competitive market (Case, Fair, & Oster, 2009).
It will also discuss the changes within the industry after switching to a monopoly and the benefits, if any, of the potato chip industry being ran as a monopoly. A monopoly can be considered the opposite of perfect competition. It is a market form in which there is only one seller. The definition of a monopoly is an industry composed of only one firm that produces a product for which there are no close substitutes and in which significant barriers exist to prevent new firms from entering the industry (Case, Fair & Oster, p. 254). By the lawyers buying up all the potato chip firms in the region they have eliminated the competition.
To a business entrepreneur, this fundamental attribute of patents of excluding all others from commercial production and selling of patented inventions, is a powerful protection from the proliferation of competitors in a specific business territory. Depending on the market, excluding competitors from direct competition can be extremely valuable (Inventor Basics, 2011). This attribute gives the inventor business monopoly which is likely to lead him to tremendous growth. Patents are also powerful tools to small business entrepreneurs who cannot stand the capacity of some big companies. If it were not for the protection of patents, big companies, with their robust capacity, would surpass the small business entrepreneurs in speed and cost of production and thereafter suppress them completely.
However, holding multiple SUBS is one of their major threats. Takeover of other companies is possible for the sub independent businesses. ABF should work to avoid this scenario. Another disadvantage is the prevalence of new private companies in different sectors. Such companies would not only be a threat to the independent business but to the group as a whole.
Since the Industrial Revolution, pure monopoly has existed and has even accelerated to the point that it was considered by some to be antithetical to our country’s basic market system. Because of this preconceived notion, the United States government put into place laws and regulations that businesses must follow in order to be deemed legal (Monopoly, 2011). So then, one might ask, how in today’s market system do pure monopolies exist? This paper will discuss the main characteristics of a pure monopoly, including the barriers that exit so other firms cannot enter into the market with the same product, and their control over pricing of its product. There have become less and less industries that would be considered a pure monopoly, but some industries of pure monopoly still exit because of the characteristics of their business (Brue, McConnell, & Flynn, 2010).
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.
Every corporation is created in order to make profit and provide a service or a product to the consumer.Most consumers do not understand the complexity of the products they buy and the possible harm they could cause.Since large corporations created such a product, they alone have the knowledge of how to safely dispose of their product.Therefore corporations should provide information on their products to aid the consumer to understand the possible dangers of the products they purchase and how to dispose of them safely. Last but not least, no solution is 100% effective.There will still be pollution created by the products manufactured by large corporations. Corporations should therefore provide a solution that will minimize any loss they might make in disposing the byproduct of their products, dispose their products safely and involve the consumer in the disposal procedure, in order to educate the consumer as well as informing the consumer of what to do and what not to
Furthermore, all companies have capacity to compete. No switching costs and product differentiation raise the degree of competition because it is easy for them to go where the lowest prices are. This characteristic leads to price wars which is present in the industry. Industry growth is the only factor that lowers rivalry – growth is high with few stores opening so companies do not need to compete for market share. Power of Suppliers – Low There is low supplier concentration relative to the industry they sell to and a single supplier does not account for a large part of a retailer’s business.
Furthermore these immigrants are taking whatever jobs they can find, and because of this they are doing some of the most undesired jobs in the nation. Some people would argue that the illegal immigrants are taking money from our economy, but this notion is also quickly put to rest, as these workers are putting there money right back into the economy as they buy cell phones, or parts for their cars, or any number of other goods. Because they purchase goods they help other businesses prosper and more jobs are created. Hence the non-legal immigrants are not a hindrance to our society but rather they help it. These people are close to the bottom of our society and yet they provide a crucial role.
There are many reasons as to why this should be the case. If electronic media was free of charge, then there would be no motivation for professional artists, actors and directors to create the media in the first place. This would negatively affect the economy, and most likely the jobs, careers and even colleges would be lost as a result. I think it is somewhat fair to consider some of the opposing views concerning this growing problem in the global scheme of things. The act of stealing and thievery has a negative effect on multiple parties.