This week in Economics was all about competition. There are four types of competition: perfect competition, monopolistic competition, oligopolies, and monopolies. Perfect competition and monopolies are on opposite ends of the spectrum. Perfect competition has many sellers and more freedom to enter and exit the market. The buyers have control of the price of the product in perfect competition and sellers have control over the price of the product in a monopoly. There are 4 types of monopolies: natural, governmental, technological, and geographical.
I found that the different types of monopolies provided a new perspective on them. We discussed how each monopoly can be helpful. The idea that a natural monopoly can actually decrease the price of a product was introduced. We also talked about how the government has monopolies on certain goods and services because they are not profitable for private enterprise, but they are necessary. We also found out that there are technological monopolies because they have a patent that lasts 20 years. When a business is formed far away from any business that offers that same good, they have a monopoly on that product. These monopolies all have different reasons for forming and they can have either a negative or a positive effect on the economy.
The concept of these monopolies is very important because people can understand whether or not the monopoly is either good or bad for the economy. The knowledge that we gained this week gives us a greater understanding of the business world. This helps us understand why the government does or does not work to fight a monopoly. The help or hurt that the monopoly can cause is essential to understand in the future if we are ever to start a business so that we understand how to make the greatest price while getting the greatest profit.
Works Cited
"Russian Election Monopoly Board." The Poke. Web. 04 Apr. 2014.
This post sums up the week in a well rounded nutshell! Examples would ice the cake, but aren't needed. Keep up the good work!
ReplyDeleteOh wow, Ani, that was great! It really helps when you summarize it all like that, and provides an outside perspective. I agree that the knowledge of what we learned over the course of this week will aide us later on in life, and is essential to life choices.
ReplyDeleteDon't forget that we went over partnership (general, limited, and limited liability), sole proprietorship, and cooperation. Also we watch a movie on Pepsico and did some assignment on Friday.
ReplyDeleteP.S. Mayor, we got two fugitives. Jean Yanez and Nick Tang. Requesting backup, they have assaulted some citizens and they are denying arrest. Requesting backup... Fugitives on the run.