Describe an important difference in the way an economist and a businessperson might view a monopoly
Include text book in reference
Describe an important difference in the way an economist and a businessperson might view a monopoly.
The assignment is to answer the question provided above in essay form. This is to be in narrative form. Bullet points should not to be used. The paper should be at least 1.5 – 2 pages in length, Times New Roman 12-pt font, double-spaced, 1 inch margins and utilizing at least one outside scholarly or professional source related to organizational behavior. This does not mean blogs or websites. This source should be a published article in a scholarly journal. This source should provide substance and not just be mentioned briefly to fulfill this criteria. The textbook should also be utilized. Do not use quotes. Do not insert excess line spacing. APA formatting and citation should be used.
An Economist and Businessperson View of Monopoly
The monopoly market structure exists when an individual business venture or a single business operator is the sole supplier of a given commodity or service in a specific market. A monopoly market structure occurs due to the effects of free-market capitalism that enables a particular entity to grow vastly, taking near-total or complete control of the market and its products’ supplies. Besides, a monopoly can be pure with a complete, 100% market share in the market place, or a firm with 25% and above monopolistic power. The monopoly market structures are vastly expanding in various nations worldwide, and dependent on one’s point of view, they can be beneficial or detrimental. While the monopoly market structure is broadly immersing itself into the world, there stands a crucial difference in how it is viewed from an economist and a businessperson angle.
A monopoly market structure can be gravely detrimental to society’s economic status. An economist is a professional who analyzes the relationship between resources produced in the society and their production inputs and outputs, combine with the labor aspects of production. Thus, any economist will view monopolies as detrimental, as they negatively impact the economy and commodity products, consequently affecting the community. The monopolistic market organization gives pricing power to the owner leading to an unreasonable heightening of commodity prices for consumers, affecting the community’s welfare (Zeuthen, 2018). More so, there is a barrier to entry in a monopoly market, meaning new companies cannot invade the market. Therefore, new products are not allowed in, resulting in lesser choices for the community. Overall, an economist will view monopolies as a problematic aspect as it negatively impacts the society’s welfare by lessening products into the market and unnecessary increment of commodity prices.
Meanwhile, for a businessperson, monopolies have become their pots of gold. A businessman or woman works in a specific business sector. Their job is to perform tasks that generate cash flows, sales, or revenues through the utility of human, physical, financial, or intellectual capital that enables economic development and growth. Hence, a businessperson will find a monopoly market structure a beneficial aspect as it enables him/her to maximize profit. The marketing strategy of a monopoly provides a go-ahead for owners to increase the prices of commodities; thus, the businessperson can heighten costs of items to their hearts’ content enabling one to yield maximum profit from the business venture (Zeuthen, 2018). More so, the economics of scale aspect of the monopoly market structure guarantees low costs of production. Therefore, the businessperson buys quantities of products at reasonable discounts giving him/her power to lower its market items to meager costs that push away potential competitors (Zeuthen, 2018). It shows then that the monopolistic market structure is viewed as a beneficial aspect from a businessperson standoff point; it aids in maximization of profits and eliminates possible undesired business competitors.
Overall, a monopoly market structure can be viewed differently from an economist and a businessperson’s eye. A monopoly is a business that allows for single products’ suppliers in the market. For an economist, the monopoly organization is detrimental as it interferences with society’s financial welfare; it leads to an unreasonable increment of product pricing and reduction of the items in the market. However, monopolies are ideal for a businessperson as they maximize profits and put off any potential competitors.
Zeuthen, F. (2018). Problems of Monopoly and Economic Warfare (Vol. 25). Routledge.