10 Jul Economics Initial Discussion post
Question Description
You must make 2 original posts one on each of the topics. (this is discussion so I need your opinion without resources )You also must respond to a post(Please respond to the three students that I mention down) . That makes a total of 3 posts per student.
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topic
What are the characteristics of pure competition and how do they differ from those of pure monopoly?
In your opinion a firm whether it is a purely competitive firm, a pure monopoly, a monopolistic competition or oligopoly pursue certain goals. Besides profit maximization, what other goals do firms pursue?
Why would a pure monopoly discriminate in its pricing policy. How effective is this in raising profits?
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Student 1/A pure competitive and pure monopolistic market are two major market structures with a few distinctions. In a pure competitive market, there is a large number of firms producing standardized products hence buyers have choices. Firms in this kind of market are price takers as they cannot change the market price but can only adjust them. Barriers to entry in pure competitive markets are relatively low thus allowing firms to enter and exit freely. Unlike the pure competitive kind of market, a monopolistic market comprises of only one firm that tends to be the seller of goods and services. This therefore means that the single firm is the controller of prices as it has total control of the market. In this kind of market structure, entry and exit are blocked as firms in this structure have total market share thus even the smaller ones are dominated by the bigger firms.
In my opinion, other than profit maximization, firms in the various market structures aim at dominating the market in that their goods and services are well known to the buyers hence securing a ready market amongst other producers. This assures them sustainability in the market.
A pure monopoly would discriminate in its pricing policy as a strategy to increase total revenue and profits. Strategies like price discrimination allows profit maximization as firms can extract consumer surplus and turn it into profits. It also leads to increased sale volumes to capture new consumers in the market.
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Student 2/
Characteristics of pure competition consist of a very large number of firms, standardized type of product, very easy conditions of entry with no obstacles, no nonprice competition, with no control over price. Where as pure monopoly characteristics consist of just one number of firms, has a unique type of product with no close substitutes, blocked conditions of entry, mostly public relations advertising, and a considerable control over price.
In my opinion, besides profit maximization another goal firms can pursue is to increase market share. An increased market share increases monopoly power and can help enable the firm to put up prices and make more profit in the long run.
Price monopoly discriminates in it’s pricing policy in order to increase its profit, and is quite effective.
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Student 3/Characteristics of pure competition comprise of countless, institutionalized kind of item, simple states of passage without any obstructions, no non price rivalry, with no influence over cost. Where as unadulterated restraining infrastructure attributes comprise of only one number of firms, has a remarkable sort of item with no nearby substitutes, blocked states of section, for the most part advertising promoting, and a significant command over cost.
As I would like to think, other than profit maximization, another objective firms can seek after to build a piece of the overall industry. An expanded piece of the pie builds restraining infrastructure control and can help empower the firm to set up costs and make more benefit over the long haul.
Cost imposing business model segregates in it’s estimating arrangement so as to build its benefit, and is very useful
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