Question 1 of 19 5.0 Points One defining characteristic of pure monopoly is that: A. The monopolist is a price taker B. The monopolist uses advertising Correct C. The monopolist produces a product with no close substitutes D. There is relatively easy entry into the industry, but exit is difficult Answer Key: C Question 2 of 19 5.0 Points Which is a barrier to entry? A. Close substitutes B. Diseconomies of scale Correct C. Government licensing D. Price-taking behavior Answer Key: C Question 3 of 19 5.0 Points Other things equal, which reduces competition in an industry?
589-590) A natural monopoly is where one company produces a product at a lower cost to the consumer than any other company. In a natural monopoly the competition is not economic. An oligopoly is when there are several companies producing a product, instead of only one. (McConnell, 2008, pp. 455-457) They also act like a monopoly because they can control their prices.
“Discuss the extent to which a monopoly provider of transport will always increase economic efficiency” (20) Economic efficiency is where both allocative and productive efficiency occur, this is where price is equal to marginal cost and the least possible amount of scarce resources are used to produce the maximum output. A monopoly can refer to a single firm in a market or owning 25% and 40% of the market share. The traditional monopoly theory states that there will be productive and allocative inefficiency in the market since, the firm will hold back supply to gain a higher price. It will not produce where average revenue meets marginal costs. In terms of resource allocation this may mean that demand is not fully met by supply.
This is the point where profits are maximised. However, it is not always the case that a firms main objective is maximising profit. Some firms' main priority may be to maximise growth. Growth maximisation is where the firms main objective is to increase the size of the firm as much as possible. In the leisure market, this may apply to businesses such as Clinton Cards.
Heather Moorehead M4 – Written Assignment 1.) Export capital for production abroad The exporting of capital for production would not be supported by a utilitarian and would be found to be unethical. A utilitarian would argue that by allowing our capital to be produced abroad we would be hurting ourselves domestically by giving up potential jobs to workers internationally and by limiting domestic usage. In today’s economy a company can set up production plants in virtually any country they want, and most tend to go where the cost of labor is least expensive. A utilitarian’s goal is to determine how to obtain “the greatest possible balance of good over bad for everyone effected by our actions” (Shaw & Barry, 2013).
METHANEX is the world’s largest methanol producer, whose success is in large part due to its cost leadership and reliable delivery. The purpose of this report is to analyze the situation facing METHANEX and recommend a set of strategic plans for it to tackle the current challenges in moving forward. In ensuring low-cost production, many of METHANEX’s production plants are based in emerging market economies. This strategy is met with various problems of poor infrastructure and political instability, resulting in inconsistent gas supply and crippling its production plants. In addition, the lack of diversification makes METHANEX completely reliant on the stability of the market for methanol.
3. Based on the results in Appendix B, different methods of recruitment are successful or failures based upon the market. The most costly and least beneficial method does seem to be the kiosk method. There is a large up front cost and the benefits and recruitment results do not support the cost. The referral program seems to be successful in the markets in where it is used.
The economic benefits of high customer loyalty are measurable. When you consistently deliver superior value and win customer loyalty, market share, revenues and profitability all go up, and the cost of acquiring new customers goes down. A clear and structured new customer induction scheme will boost customer loyalty and retention, increase the frequency of purchase and raise the dollar value of each transaction and increase referrals. Customer induction schemes are a vital step in business growth as they deliver higher yielding customers and drive up profits by reducing the need to spend money attracting new customers. It is very much about long term retention marketing and is purely created through exemplary customer
This happens when production of the good requires extremely large initial capital investments to even enter the market in a modest way but then producing additional output requires only very modest additional outlays beyond the fixed initial investment. They can be established by a government, form naturally, of by mergers and acquisition. The justification for natural monopolies according to economic theory A single monopoly firm can produce the amounts of goods the consumer demands at a lower total cost in resources than many competing firms can. It is therefore cost effective. According to economic theory monopolies have a tendency to extract natural resources aggressively to consumers An example to support your explanations Examples of natural monopolies include utilities like electric power transmission systems and water supply systems.
Assuring competition is critical to maintaining low prices, high quality, and business efficiency. Blair and Lopatke (2008 explained that by eliminating the competition, dominant sellers can increase monopoly profits and deadweight of social welfare losses can occur (p. 442, 439). But not all monopoly companies causes harm, some companies like the water utility, natural monopoly, and is regulated by the government (McConnell, 2012, pp.