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Perfect Competition Market And Monopoly Market Economics Essay

What is the marketplace? Market is a place and retailers come face to face with buyers for the reason that place. But communication and travel revolution changes it from a place Todays technology makes it an ''environmental. '' Owner or potential buyers can supply or demand any goods with mobile, fax or internet. The marketplace lost its concrete routine.

The markets status and quality are incredibly important for the execution to full competition guidelines. The concept and meaning of the market is very important to that subject.

Some economists split to the marketplace into two parts. These are; correctly competitive market and imperfectly competitive market. I'll explain to monopoly market type and oligopoly market kind of imperfectly competitive market and I am going to touch after some top features of properly competitive market for understand variations.

MONOPOLY MARKETS

One of the types of imperfect competition is monopoly marketplaces. It is some sort of market which is far from perfect competition market. There is merely one designer/seller for a product so the sole business is the industry. Difficult to go into such market and requires high cost. You will discover economic, cultural and political restrictions of these markets. For example, when a government wants to regulate, such as electricity, it can be produce a monopoly over that industry.

Monopoly market gives to its owners some special rights and privileges for an asset or a natural resource. For example, in Saudi Arabia, the government has exclusive control over the petrol industry. There is absolutely no fear of seller from any competing firms. Because of there is not another company that produces same goods or supply of same goods. Therefore monopoly organizations move in independence about sales price.

CHARACTERISTIC OF MONOPOLY MARKET

The most important factor in the formation of monopolistic market is the supply of goods that cannot be easily substituted. f you can find substitution of goods for the reason that market, monopolistic firm's efficiency will be reduced and it's freedom will be limited about price dedication. For instance a monopoly organization cannot determine high price for prices of lignite coal. Because of there are other styles of coal and electricity in the market. That organization should consider to indirect competition. The second factor the monopolistic firm has to think purchasing vitality of buyers. Because of if the company determines higher value, it may well not find any buyer.

I want to provide example about monopoly of Turkey. Licorice main receiver is only monopoly supervision in Turkey which is called '' buyer monopoly''. There is only one seller in turkey about soda pop and food acids which is called '' retailer monopoly''.

Four resources of monopoly electric power;

Natural monopoly

If a small business has natural resources, it will provide to likelihood a monopoly for business. For instance a hotel can gain monopoly electricity with a good beach and a perfect landscaping. Some countries have natural monopolies which on the mines or agricultural products at the international level. Coffee, pineapple, engine oil, chromium are natural monopoly products in a few countries.

Legal monopolies;

Legal monopolies split into two; private monopoly and a open public monopoly. Types of legal monopoly in turkey; raki plus some spirits, rail move, postoffice services, radio and TV services. These predicated on privileges distributed by law. Private organization can has legal monopolies. Patent rights are a form of legal monopoly. Patent share with a right to make use of for someone who invented a fresh property. Patent protection under the law are protected by law and there's also international agreements on this subject.

Contract monopolies;

Several big companies make a package for eliminate to competition between them. This Collective monopoly usually evolves in Germany. Cartels are made up for remove to competition on price and sales conditions. Trusts develop at USA; Cartels task to legal presence, There is not legal existence for the customers of trust. For example; all aircraft soaring to form a cartel beyond your socialist countries, Plane Company will receive the same wage but each aircraft company is dependent.

actual monopolies;

Firms may take advantage of an actual situation. For instance, if the company is the first company on arm of a business, it's rather a power in that market for a long time.

OLGOPOLY MARKET

There are only a few organizations that make up an industry within an oligopoly market. It is market type which includes a small amount of sellers and a lot of buyers. This select group of firms has control over the purchase price such as a monopoly. Oligopoly market has generally three, five or eight large companies and their capabilities are add up to each other. There are a few giant companies in that market about important items. For example, copper, lightweight aluminum, ferrous metals-steel, automobiles, tractors, trucks, car tires, petro-chemical and heavy establishments have only three or five big firms in their own markets.

There are two retailers and a lot of buyers searching for a good, the name of market are duopoly market.

In oligopoly market segments, number of vendors is no less than monopoly markets including the cost routing of electricity weaker than monopoly markets. But this number is not too much; each you can affect the price level.

The company's withdrawal from the market is important event in oligopoly market. It caused to rise prices. It impacts to the total supply. The other palm is if a new firm enters the marketplace, prices will land and other organizations will be disturbed from that concern.

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There are a small number of organizations in oligopoly market so a company affects to other businesses about some things. These themes are production variety, the quality of the goods, effort to increase about amount of sales, price coverage. Each company has to follow other firm's position. It loves gambling player. Some economists make clear to oligopoly theory with game theory. The businesses want to protect the certain price level and keep maintaining price in oligopoly market segments. There's a secret agreement one of the businesses about price.

Types of oligopoly market;

Homogenous oligopoly: If the goods of all companies is comparable nature for the reason that market, it will be called ''homogenous oligopoly''. For instance cement, material and aluminum sectors. Degrees of dedication to the other person are very saturated in homogenous oligopoly. ±f a firm cheap, it effects to rival firm's sales

Differentiated oligopoly: If the products of companies is different from one another in that market, it'll be called ''differentiated oligopoly''. For instance, automobiles, machinery and building materials. Price changes create less impact on competitors. In short, if the degree of differentiation rises, interdependence between organizations will be reduced

Full oligopoly; oligopolistic businesses create a group and they try to maximize their gains. Dependence between companies is very strong

Partial oligopoly: That kind of oligopoly is opposite to full oligopoly and dependence between organizations is weak so companies don't create an organization.

PERFECTLY COMPETITIVE MARKET

Perfectly competitive market people;

The purchasers and retailers cannot influence to price together in that market. Quite simply firms cannot connect with independent price insurance plan under the perfect competition. Price is obvious and companies have to accept it. This is shown with horizontal price brand.

The conditions of perfect competition market are as follow;

There are a great deal of sellers for the reason that market who produce the same goods and there are a great number of buyers for the reason that market who wish to choose the same goods.

If a firm increases or diminishes to its amount of sales, the price tag on goods won't change too much. Due to there are many vendors for the reason that market. Inside the other words, each company must agree to as the market price.

The same situation pertains to the buyers. There are various buyers for the reason that market. The amount of the purchase decisions of potential buyers don't effect to the price tag on the goods too much. That situation is called '' the assumption atomistic''.

The potential buyers and sellers easily enter to advertise and they can simply get out of the market. If the businesses want, they can move to another industry or other business.

Produced or sold goods are homogeneous in perfectly competitive market. Within the other words, there no difference between your same kind of goods about quality and features.

Both purchasers and retailers have full knowledge of the market. That is called ''openness assumption''.

COMPARISON OF PERFECT COMPETITION MARKET AND MONOPOLY MARKET

In perfect competition market, organizations make sales with lower prices than monopoly market. Because of the monopoly market's equilibrium price is higher level for long-term.

In perfect competition market, companies make to more low-cost development but monopoly market's production cost is greater than perfect competition.

The amount of development of perfect competition organizations is more than monopolistic organizations so their development is more and cheaper than monopoly market.

Idle capacity can be a large problem for monopolistic organizations. You can find extravagance of creation resources in terms of culture.

Monopolistic companies' earnings are abnormal. It brought on to inequalities in income circulation. It is not comport with '' public justice'' rule.

Perfect competition's demand curve is totally flexible, in other words it is horizontal price range. But monopoly market's demand cure is same adversely sloped market demand curve.

If the marginal cost is equal to price, perfect competition market will be equilibrium on that time. But it differs for monopoly market. If marginal earnings is add up to the marginal cost, it will be equilibrium on that time.

AN EXAMPLE ABOUT OLGOPOLY MARKET OF TURKEY

Information and communication industries are developing lately in Turkey and it includes exceeded to the limits of the united states. That sector was more influenced by the scientific developments. More than ten years ago public groupings hold the telecommunications companies. That's called '' monopoly''. However, today this company isn't only fixed phone service.

Mobile and cellular phone, internet, cable television, electronic commerce effects to it's structure. All countries change their industries and companies start new market.

Changes in the Telecommunications sectors;

Years 1980s; secured monopolies, steady demand, weakened competition

Years 1990s; strong structure, retail services, regional competition

Years 2000s;competitive composition, international competition, this period are information years and mobile communication, provide to added-value services ( for example internet)

LIBERALIZATION, LEGAL AND ADMINISTRATIVE Agreements N TELECOMMUNICATIONS MARKET OF TURKEY

Telecommunication sector creates the essential infrastructure of information population. This sector has economic and commercial value which really is a strategic sector. That sector was under state monopoly in old-time. But technical, economic and sociable advancements at the global level affected that framework. New telecommunication order goals to provide that service in competitive environment.

Before 1990s, there was a monopoly market structure in telecommunication industry. Turkish Telecom Company experienced that sector with legal monopoly. In July of 1993, Turkish telecom and Turk cell, Telsim companies authorized cellular phone system contract for share income. Both of the companies paid 500 million U. S. us dollars for license price. Turkish telecom got 67. 1 percent of income for the reason that sector, Turk cell and Telsim had 32. 9 percent of income for the reason that sector recover agreement. After Aria company came into the market. Turkish Telekom was privatized and Aycell Company of Turkish Telekom joined this competition. Over time of your time, Aria and Aycell companies made a decision to unite plus they created to ''Avea''. Telsim was sold to a fresh company and it offers a new name that is ''Vodafone''.

Market and competition conditions of GSM operators in Turkey are oligopolistic market policies. There are 3 big companies in that sector. They are; Turk cell, Telsim and Vodafone. If one of these has a fresh price policy, it will be effects to the others. In this case, other companies can opt to lower price, they can make some advertising and sales companies or advertising advertising campaign. This sector in Turkey has all the features of the oligopoly market.

CONCLUSION

Conditions of imperfect competition are an obstacle before the development. The marketplace price is in the hands of any person in the monopoly market. Some individuals share to the marketplace in oligopoly market.

There are extensive buyers and retailers in perfect competition environment. Price doesn't belong to a particular group. The competition provides to improve of countries. Turkey is working for provide to perfectly competitive market conditions in its all sector.

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