EXAMINE THE UTILITY OF THE FREE MARKERT STRUCTURE IN PROMOTING TECHNOLOGY DEVELOPMENT.

Topics: Monopoly, Economics, Oligopoly Pages: 2 (715 words) Published: October 20, 2014

Examine the utility of the free market structure in promoting technology development. Market structures have a role in promoting technological progress. There are four market structures which are; pure competition, monopolistic competition, pure monopoly and oligopolistic firms. Each of these market structures have strength and shortcomings in relation to technological advance. However the oligopolistic or free market structure has more strength than shortcomings in promoting technology. This essay is going to examine the utility of the free market structure in promoting technology. As a first step towards doing this, the paper shall attempt to give definitions of key terms which are; free market structure and technology. It will also survey the strength and shortcomings of free market structure in relation to promoting technology. The paper will to a greater extent describe the characteristics and behavior and the free market structure which makes it conducive for promoting technology. These characteristics shall include; large size of firms, existence of barriers, large and broad scopes of research and development activity. The behavior shall include interdependence and non- price competition. Insopedia financial dictionary defines the free market structures as characterised by a small number of large firms that dominate the market selling either identical or differentiated products with significant barriers to entry into the industry. Oligopolistic industries are as diverse as they range from breakfast cereal to cars, from computers to aircrafts from television broadcasting to pharmaceuticals, from petroleum to detergents. Technology is defined as the purposeful application of information in the design, production and utilization of goods and services and the organization of human activities (business dictionary). Technology generally divided into five catagories ; tangible intangible, high, intermediate and low. Free market structure is a market...
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