Prompt 3
11/3/2014
Prompt #3
Markets have four different models which are perfect competition market, monopolistic competition, oligopoly, and pure monopoly markets. Each market has its own characteristics in terms of barriers, price control, and the kind of products. An oligopoly market can be defined as a market which has a few large producers of homogenous or differentiated products. Moreover each firm is affected by the decisions of its rival and must take those decisions into consideration when setting its own price and quantity. Regulating the merger activity by governments at oligopolies markets could be economically and socially beneficial for them.
Regulation the merger activity by governments in oligopolies markets has a lot of economic benefits. The merger activity leads to control prices between firms which has the power to ruin the other firms and reduce the competition. Moreover, governments that put rules in these kinds of markets would get more firms compete with each other’s which means more taxes would be received by the governments. Barriers in oligopoly market can lead to market failure, so when governments set regulations that would lead to a stronger market’s stability.
Perhaps the regulation that is made by governments in markets where firms have the power to control the price and control the quantity of the output could have social benefits for governments. These rules safe the consumers from the activities that are against the consumer such as imposing external costs to the consumers from the firms. Moreover, laws which the governments set up could potentially raise the satisfaction of the consumers which gives the governments social benefits which are known self-satisfaction of citizens.
The benefits that governments receive from the regulation that are made by them can be social and economic. Firms in oligopoly markets can make the market harmful, so these rules are the most effective solution to reduce the
Prompt #3
Markets have four different models which are perfect competition market, monopolistic competition, oligopoly, and pure monopoly markets. Each market has its own characteristics in terms of barriers, price control, and the kind of products. An oligopoly market can be defined as a market which has a few large producers of homogenous or differentiated products. Moreover each firm is affected by the decisions of its rival and must take those decisions into consideration when setting its own price and quantity. Regulating the merger activity by governments at oligopolies markets could be economically and socially beneficial for them.
Regulation the merger activity by governments in oligopolies markets has a lot of economic benefits. The merger activity leads to control prices between firms which has the power to ruin the other firms and reduce the competition. Moreover, governments that put rules in these kinds of markets would get more firms compete with each other’s which means more taxes would be received by the governments. Barriers in oligopoly market can lead to market failure, so when governments set regulations that would lead to a stronger market’s stability.
Perhaps the regulation that is made by governments in markets where firms have the power to control the price and control the quantity of the output could have social benefits for governments. These rules safe the consumers from the activities that are against the consumer such as imposing external costs to the consumers from the firms. Moreover, laws which the governments set up could potentially raise the satisfaction of the consumers which gives the governments social benefits which are known self-satisfaction of citizens.
The benefits that governments receive from the regulation that are made by them can be social and economic. Firms in oligopoly markets can make the market harmful, so these rules are the most effective solution to reduce the