Economics for business Essay Example | Topics and Well Written Essays - 2000 words - 1

Economics for calling - Essay ExampleIn order to find the marginal cost we leave behind calculate the showtime derivative of total cost functionMonopoly is a merchandise structure where there is a iodine producer or seller of the product in the mart with no substitutes available. This means that the ultimate cater lies with the producer or seller and not with the consumer. In other market structures, the authority to choose a product is in the hands of the consumer but in a monopolistic market there atomic number 18 no substitutes available and the consumer has to accept what is being offered to them.Monopoly is considered ineffective due to the fact that the market doesnt switch any substitute of the product giving the producer or seller an authority to set impairments accord to their need. They usually discriminate regarding the prices and charge higher than the marginal cost of production in the market. Such market doesnt focus on the consumers as they are aware that no matter what ultimately the consumers will choose their product even if the quality of the product is below the standards. In such market structure, the barriers to incoming are high giving no or little entry positions to other businesses. As a result of the barriers there is no competition or rivalry in such market.This market is considered inefficient than the other market structures because this market produces less takings as compared to others. With no competition, reduction in the output level leads to high prices. It also creates inequality because it converts the consumer surplus into producer surplus. This inequality between the price charged and the marginal cost makes this market inefficient. This means that there is price discrimination in such market and some consumers have to pay higher prices.In monopoly the output level is less and creates unemployment of the resources. The resources are not properly and efficiently utilized as compared to other market structures. In such market the price is greater than the marginal