Sample Economics Essays On Monopolies as a Form of Business

Homework Question on Monopolies as a Form of Business

  1. Write one page on why monopolies as a form of business is not the problem, but their behavior could be

Homework Answer on Monopolies as a Form of Business

Monopolies forms of business have substantial potential to harm both democratic governments and economies. Unfortunately, the harm is normally not apparent to people as it is with advantageous effects. Mainly, monopolist goes to an extent and hides or disguises such damaging effects. The undesirable effects of monopoly business can be more evident on a personal level than in aggregate. The effects comprise the damage of business that would have endured so long as competition had been based only on price and quality. In this case, they set prices for their products so high causing hardship or being too expensive for some individuals.

It is frequently assumed, even by those having negative opinions regarding monopolies, that monopoly itself as a form of business is not actually bad, however, it is out of its abusive behaviours that makes it harmful. The mistreatment of monopoly influence obviously can be detrimental to the financial system. In this context, the term mistreatment refers to tactics such as greedy pricing, conspiring with suppliers as well as taking control over single product to gain monopoly power for another product.

Homework Help

If monopolists behave in a way to produce outcomes similar to those by business in an industry, which is portrayed by intensive rivalry, then there may not be any issue. Conversely, this is uncommon even for apparently generous monopolists. This is because the very powerful incentive to increase profits for nearly all businesses, whether pure monopolist or perfect competitor, produce very diverse results for monopolists that they would do for a business in an extremely competitive industry.