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Yes, perfect competition allows the market to dictate prices where as a monopoly can set any price because there is no other alternative.

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โˆ™ 2009-09-15 12:07:26
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Q: Is perfect competition better than monopoly?
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How do you avoid monopoly?

If you mean the business type, then competition is the answer. If you are the competition, then offer the customers better than the main competitor. If you are the monopolizer, then good.


Comparison between monopoly and perfect competition?

first we need to find what is monopoly and what is perfect competition. Monopoly is the market structure that have only one seller, and only sell the unique products. And Monopoly also have very high barriers entry and its impossible to entry. Otherwise, Perfect competition is the market structure that have many small firms, and only sell the homogeneous products. Perfect competition also have a very low barriers entry, so its very easy to entry. The comparison: - Monopoly more inefficient than Perfect competition because the resources are under allocated to the production of its product - The demand curve for a perfectly competitive firm is perfectly elastic and the demand curve for a monopoly firm is The market demand, which is negatively-sloped according to the law of demand - The monopoly firm charges a higher price and produces less output than would be achieved with a perfectly competitive market - While an economic profit is NOT guaranteed for any firm, a monopoly is more likely to receive economic profit than a perfectly competitive firm. - The positively-sloped marginal cost curve for each perfectly competitive firm is its supply curve.


How does a corporate monopoly impact the economy?

A monopoly can have several positive and negative impacts on the economy:Create jobs with relatively high salaryResearch and development leads to advance in technology (since monopoly has more funds than other companies)Able to exploit economies of scale (due to large scale production being a monopoly) => low average unit cost.Negative impacts:High probability for the firm to charge a higher price (since there are no competitors; monopolies are price makers)Act inefficiently (don't have a fear of being competed out of the economy)Huge negative externalities especially on environments.Generally, monopoly are observed to have negative impacts on a country's economy, justifying the creation of anti-trust laws (to break up the monopoly.)


What are some examples of monopoly besides US Postal services?

Electronic Banking; Here & Now Limited Edition; Monopoly 2008; The Beatles Monopoly; Delux Edition; Simpsons Monopoly; Disney Pixar; Nintendo; Mega Edition; Junior Edition; Spongebob; Spiderman; Transformers; Family Guy; Clone Wars; Express Edition; Indiana Jones; Planet Earth; Wizard of Oz; Pirates of the Caribbean; Disney; Pittsburgh (they actually have almost any city); and almost any other version you can think of. Although I must note that I was unable to find any example of a US Postal Service Monopoly, perhaps you should suggest it to Hasbro. If you however meant to inquire as to the existence of monopolies other than the US Postal Services I must first point out that they aren't necessarily a monopoly. In fact given the existence of UPS, FexEx, DHL, and many other carriers, the postal service is certainly not a monopoly. In fact defining something as a monopoly can be tricky. Unless you restrict the term solely to businesses who the government has given exclusive privelege to conduct a business, than only very specific fields are monopolized. Certianly the production and sale of Viagra is monopolized by Viagra, but thanks to about 30 thousand other companies, there is no monopoly in the treatment of E.D. If however you want to know about some government granted monopolies than their are many. Most notable there is Halliburton which has received over $21 billion dollars in exclusive no-bid contracts. In fact any time the Government hands out a no-bid contract they have created a monopoly. Perhaps Hasbro should make a Halliburton Monopoly Edition. Instead of a top hat and car you could have Dick Cheney and George Bush. Instead of Board Walk and Park Place you could have The White House and The Naval Observatory.


What is a quasi monopoly?

Quasi-monopoly is a kind of monopoly where there is more than one service provider for a particular good/service but the nature of the competition is such that similar kind of service/pricing is offered to the customers.Generally speaking, quasi-monopolies occur when the marketplace in question has several characteristics:There are a very few number (generally 4 or less) of very large suppliersThe requirements of the market are such that there is an extremely high barrier-of-entry to be competitive; that is, large, well capitalized (and possibly vertically-integrated) companies cannot effective be challenged by any newcomer not of the same size. In essence, the market is impenetrable by smaller (and/or more innovative) companies.The type of product or service being produced leads to very little (if any) product differentiation between the companies in the marketPricing is thus more a factor of the lack of competition between the few existing companies, than it is supply/demand.For instance, a good place where a quasi-monopoly can occur is aluminum production. Ownership of supplies of aluminum create a barrier to entry, and the extremely large amounts of capital (and large efficiency gains that being fully vertically integrated provide) required means that such industries tend to have only a couple of huge firms. The product (processed aluminum) is very straightforward. Thus, this is a marketplace where quasi-monopolies almost always exist, with seldom more than 2 or 3 companies in the entire market.

Related questions

Why is Perfect Competition as a model better for society than unregulated Monopoly?

Perfect competition allows for fairer price structures than those that would likely be seen in a monopoly.


How do you avoid monopoly?

If you mean the business type, then competition is the answer. If you are the competition, then offer the customers better than the main competitor. If you are the monopolizer, then good.


Is it a good policy for governments to completely eliminate monopoly power?

no monopoly is better in some organizations because i it gives economy of scale and its gives better services because of its large scale business but monopolistic competition is better than monopoly because in monopolistic competition , organization has discretionary power on either quantity or price but in monopoly organization have more control on price or supply than monopolistic competition and can charge price of its own will.


What are the differences between a perfect or pure monopoly a monopolistic competition oligopolies a perfect or pure competition?

Not many differences. Capitalism favors competition among private companies, but rarely creates monopolies. One source, in the references, says monopolies can be created by governments more than private companies. References: http://www.americansolvent.com/2009/07/03/competition-vs-monopoly-whats-the-big-confusion/


Comparison between monopoly and perfect competition?

first we need to find what is monopoly and what is perfect competition. Monopoly is the market structure that have only one seller, and only sell the unique products. And Monopoly also have very high barriers entry and its impossible to entry. Otherwise, Perfect competition is the market structure that have many small firms, and only sell the homogeneous products. Perfect competition also have a very low barriers entry, so its very easy to entry. The comparison: - Monopoly more inefficient than Perfect competition because the resources are under allocated to the production of its product - The demand curve for a perfectly competitive firm is perfectly elastic and the demand curve for a monopoly firm is The market demand, which is negatively-sloped according to the law of demand - The monopoly firm charges a higher price and produces less output than would be achieved with a perfectly competitive market - While an economic profit is NOT guaranteed for any firm, a monopoly is more likely to receive economic profit than a perfectly competitive firm. - The positively-sloped marginal cost curve for each perfectly competitive firm is its supply curve.


Why is monopoly bad for competition?

A "monopoly" means that there is only one firm in the entire industry. Therefore, there is no competition because there are less than two parties involved.


Is it better to have more than one producer?

Multiple producers mean competition and lower prices - avoiding a sole producer becoming a monopoly


Is monopoly better than monopoly express or monopoly express better than monopoly?

If you want something entertaing for a short period of time Monopoly Express is better.If you want somethig that is longer , Monoploy. But you could play the original Monopoly on the Monopoly Express gameboard.


A major characteristic of monopolistic competition is that prices will be .?

higher than in perfect competition


A major characteristic of monopolistic competition is that prices will be?

higher than in perfect competition


A major characteristic of monopolistic competition is that prices will be _____.?

higher than in perfect competition


What is the market concentration ratio of a perfect competition?

The market concentration ratio for perfect competition is Low (Less than 40%).

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