Monopoly...Is a Great Enemy to Term Paper

The OFT may then refer the companies to the Competition Commission (formerly known as Monopolies and Mergers Commission).

The Competition Commission also plays a major role to investigate the situations which are called 'Oligopoly Situations' which involve explicit or implicit collusion between firms. Then the Competition Commission decides if the monopoly is acting against the public interest or not. And if they find a firm with a monopoly situation they recommend measures such as:-

Price cuts

Price and profit controls removal of entry barriers breaking up of the firm which is rarely a recommendation

If a monopoly situation exists, the workers and managers would take a great advantage by using less technique, knowledge and expertise in producing a good and would enhance their means of profits. Thus the good would not be much to the standards, as it would be in the perfect competition. This is known as X-inefficiency (Brownless, C, 1989, P218), if compared to a perfectly competitive industry, considering the same cost and demand curve conditions; even then the monopolist will charge a higher price for less output.

Conclusion

Monopoly has both advantages and disadvantages in serving public or consumer interests.They have been examined by the equilibrium of monopoly and perfect competition. Through the analysis mentioned, many weak points of monopoly have been identified which include X-inefficiency, management problems and so forth. These factors often result for even bad consumer interests but on the other hand monopoly also has its potential strengths.

Bibliography

BPP Business Core Unit 4 Organization, Competition and Environment

Brownless, C, (1989) Economics Charles Letts & Co Ltd.

Brownless, C., Hurd, S., & Randall, K. (1985). BASIC economics. Butterworths BASIC series. London: Butterworths.

Sloman, J., & Sutcliffe, M. (2002). Economics. Harlow, England: Prentice Hall/Financial Times.

West, K, C, (1987) Economics GCSE (2nd) Charles Letts & Co Ltd.

Machovec, F.M. (1995). Perfect competition and the transformation of economics. London: Routledge.

Low, R.E. (1968). The economics of antitrust; competition and monopoly. Modern economic issues. Englewood Cliffs, N.J.: Prentice-Hall.

Scherer, F.M. (1993). Monopoly and competition policy. The International library of critical writings in economics, 30. Aldershot, Hants, England: E. Elgar.

Mueller, W.F. (1970). A primer on monopoly and competition. New York: Random House.

Colander, D.C. (1995). Economics. The Irwin series in economics. Chicago: Irwin.

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