Monopoly Essays - Imperfect Competition, Market Structure

Monopoly The Monopoly a) Using Australian examples describe the characteristics of the two of the following forms: Monopoly Oligopoly The main characteristics of an oligopoly are: ? The market is dominated by only a few companies, which are relatively large. ? The production of identical products which are similar. ? There are significant barriers to entry. ? The interdependence of production decisions within the market. An Oligopoly market exists in which a small number of firms dominate the supply to an entire market. Each firm producers a very similar product. In Australia the oligopoly is the major market form. It is because Australia is so small market located far from overseas markets and this thus requires producers to be larger, so they are more competitive. There are hundreds of examples of oligopolistic industries, e.g. cars (Holden), breakfast cereals (Kellogs) This market form does not only depend on the larger producers, but the recognition of their interdependence, the action of one producer will affect the actions of others and each oligopoly firm watches their rivals closely. Oligopolies compete fiercely for market share, therefore the competition for existing or new consumes is intense, as each producers products are very similar. As a result oligopolists have little influence over price. For example Shells petrol is very similar to Mobil petrol, therefore these two companies watch each other closely. Oligopoly firms attempt to make their products different in the eyes of consumers. This can be achieved in many different ways. Firstly by providing quality improvements in goods or services such as electrical sound equipment, secondly by different packaging or wrapping, thirdly by bonus offers or prizes on purchase, for example Just Jeans offering free sunglasses. The more product differentiation among oligopoly firms, there is a more chance of each firm has being independent from its rivals when setting price or output. It is hard for new firms with a small market share to enter the oligopoly market and produce enough to make the product cheap for consumers to buy. The small amount of large firms can often produce large amounts of quantity to provide for all consumers to purchase. It is difficult for new firms to win market shares form existing producers, particularly if those firms have large advertising budgets, licenses, design patents or restrict access to raw materials on one way or another. Oligopoly is a market structure, which is especially vulnerable to restrictive trade practices. The main characteristics of a pure monopoly are: ? Only one seller within the market. ? The goods produced have no close substitutes. ? There are extreme barriers to entry. ? Complete control over price. A monopoly is an industry in which there is one supplier of a good or service that has no close substitute and in which there is a barrier preventing new firms to enter. The supply of water and gas are local monopolies, while Australia Post, B.H.P and C.S.R. are examples of national monopolies. As there is only on supplier, the firms can chose where on the demand curve the industry will operate. They can either determine the price or the quantity traded. Either they can sell less at a higher price or sell more at a lower price; therefore their decision is based on maximizing their total profits. The key feature of a monopoly is the existence of barriers preventing the entry of new firms. It is once the firm has entry the market system that is losses the advantage of monopoly control. Some barriers to entry may include; control over vital raw materials, tariff protection from importers, protective government legislation, temporarily low price to force out competition and large research and development budgets to help monopolists maintain their technological advantages over potential rivals. As there is no existence of competition, advertising is mainly focused on public relations or sponsorship of major sports events. b) How effectively do the two markets forms that you described in part a meet the criteria for a successful market? A market system exists when producers and consumers interact with one another. For a successful market system to exist the following criteria needs to be meet: does the market? Deliver lower prices, provide greater choice, encourage improvements in the quality of the goods and services traded, encourage the implementation of new

Tristan da Cunha

Tristan da Cunha Located about midway between Cape Town, South Africa and Buenos Aires, Argentina lies what is often referred to as the worlds most remote inhabited island - Tristan da Cunha. Tristan da Cunha is the primary island of the Tristan da Cunha island group, consisting of six islands at approximately 37Â °15 South, 12Â °30 West. Thats about 1,500 miles (2,400 kilometers) west of South Africa in the South Atlantic Ocean. The other five islands in the Tristan da Cunha group are uninhabited, save for a manned meteorological station on the southernmost island of Gough. In addition to Gough, located 230 miles SSE of Tristan da Cunha, the chain includes Inaccessible at 20 miles (32 km) WSW, Nightingale 12 miles (19 km) SE, and Middle and Stoltenhoff islands - both just off the coast of Nightingale. The total area for all six islands amounts to a mere 52 mi2 (135 km2). The Tristan da Cunha islands are administered as part of the United Kingdoms colony of Saint Helena (1180 miles or 1900 km to the north of Tristan da Cunha). The circular island of Tristan da Cunha is approximately 6 miles (10 km) wide with a total area of 38 mi2 (98 km2) and a coastline of 21 miles. The island group lies on the Mid-Atlantic Ridge and was created by volcanic activity. Queen Marys Peak (6760 feet or 2060 meters) on Tristan da Cunha is an active volcano that last erupted in 1961, causing the evacuation of Tristan da Cunhas residents. Today, just under 300 people call Tristan da Cunha home. They live in the settlement known as Edinburgh that lies on the flat plain on the north side of the island. The settlement was named in honor of Prince Alfred, the Duke of Edinburgh, upon his visit to the island in 1867. Tristan da Cunha was named for Portuguese sailor Tristao da Cunha who discovered the islands in 1506 and although he was unable to land (the island of Tristan da Cunha is surrounded by 1000-2000 foot/300-600 meter cliffs), he named the islands after himself. The first inhabitant of Tristan da Cunha was American Jonathan Lambert of Salem, Massachusetts who arrived in 1810 and renamed the islands the Islands of Refreshment. Unfortunately, Lambert drowned in 1812. In 1816 the United Kingdom claimed and began to settle the islands. A handful of people were joined by the occasional shipwreck survivor over the next few decades and in 1856 the islands population was 71. However, the next year starvation caused many to flee leaving a population of 28 on Tristan da Cunha. The islands population fluctuated and eventually rose to 268 before the island was evacuated during the eruption of 1961. The evacuees went to England where some died due to the harsh winters and some women married British men. In 1963, almost all of the evacuees returned since the island was safe. However, having tasted the life of the United Kingdom, 35 left Tristan da Cunha for Europe in 1966. Since the 1960s, the population swelled to 296 in 1987. The 296 English-speaking residents of Tristan da Cunha share a mere seven surnames - most of the families have a history of being on the island since the early years of settlement. Today, Tristan da Cunha includes a school, hospital, post office, museum, and a crayfish canning factory. The issuance of postage stamps is a major source of revenue for the island. The self-supporting residents fish, raise livestock, make handicrafts, and grow potatoes. The island is visited annually by RMS St. Helena and more regularly by fishing vessels. There is no airport or landing field on the island. Species not found anywhere else in the world inhabit the island chain. Queen Marys Peak is shrouded by clouds most of the year and snow covers its peak in the winter. The island receives an average of 66 inches (1.67 meters) of rain each year.

Response paper Essay Example | Topics and Well Written Essays - 250 words - 7

Response paper - Essay Example Countries like China and India are in the development phase and are looking to establish themselves more in the international economy. For this purpose, they require more and more energy and as this energy is produced, more greenhouse gases would be emitted. The US and European countries, on the other hand, can afford to invest in the development of Clean Technology because they are well-developed. International cooperation asks all the countries to take certain measures to reduce the GHG. Such measures are acceptable for developed countries but under-developed countries cannot afford to comply with such requirements because of their energy needs. When these countries do not comply with international treaties, the other countries also pull out of such treaties. Apart from the economic needs, countries may also opt not to comply with a treaty because they do not want to follow the lead of Western countries. For instance, history tells us that China rarely followed the lead of US on ma ny occasions. The treaties made for better environment can work only when they are harmonized and every country contributes. This has not been the case in the Montreal Protocol and the Copenhagen