ECO 100 Principles of Economics

The main purpose of the report is to evaluate the concept of oligopoly and monopoly and explain why this concept is more relevant to the modern world. In the next section, the report highlights Mankiw’s 10 principles and discussed how these principles are foundational to these issues. Moreover, the report has also highlighted the other two articles and analysed it . Based on the above analysis, the report draws a clear understanding of monopoly and perfect competition as discussed in the video and the articles.

Introduction 

Importance of the topic

Monopoly and Oligopoly are the two types of imperfect competition. In monopoly, a single firm produces  goods where there are no direct  substitutes. On the contrary, oligopoly market constitutes few firms who produces related goods at a slightly different prices. The demographic size of the market help in the determinantion of oligopoly or  monopoly in the market (Merhav, 2017). This video discusses the  idea of monopoly and oligopoly. It also analyses the monopoly power of the screw market. Moreover, it highlights the difference between perfect and imperfect competitive market structure. An important feature of perfect competition is the free entry and exit where monopoly market assumes the barrier to entry exists in the forms of patent and licenses (Merhav, 2017). Another feature in a perfectly competitive firm is that the firms are considered to be price taker as they have a little share in the market whereas monopolist has  market power  and charges higher prices for their product in the market..

Summary of the key points provided in the video

The video has highlighted the general concept of perfect and imperfect competition and identify the key differences. In the next section, the video highlighted those concepts with two examples with the screw market industry assuming that it has the monopoly power in the market and the second is telephone service provider in the locality. The video elaborated the concept of oligopoly and monopolistic competition and finally provides a giveaway between a monopolistic competitor and perfect competitor in that they have some brand differentiation and quality differentiation between their products (Mankiw, 2014).

Validation of Mankiw’s 10 principles

In comparison to  Mankiw’s 10 principles, the video has discussed the basic idea of perfect and imperfect competition. It has also given a brief  idea of monopsony which is considered as a foundation to Mankiw’s  principle. Moreover, the article has also analysed the key structure and differences between perfect competrition and monopoly. It has also discussed how monopsonistic market emerges from oligopoly and monopolistic market structure (Mankiw, 2014).

The other related articles

The other two articles discuss about the oligopoly, monopolistic and monopolistic market structure and their differences. The concept of marketing strategy is defined as marketing plan by the marketers. On the other hand, economists view the market structure with an objective of interpreting and anticipating consumer behaviour (Ciliberto, Murry & Tamer, 2016). Oligopoly and monopolistic competition are associated with the size of the market. Moreover, the market control of each firm depends on the number of competitors in the market. On the other hand, according to several economists, the market structure is organized and this depends on the number of firms in the industry. Oligopoly consists of fewer firms that are relatively large in size. There is higher levels of concentration of the firms in the market. Moreover, the firms in the oligopoly market do not have competition among them. It is necessary to consider the reaction of its close competitors before implementing any business decisions. Therefore, from the above analysis, it can be said that each market structure represents the specific attribute and thus has a tendency to show the disparity over time. It is vital to analyse the market structure and this is considered important for the business. It is also important for the consumers to take the strategic decisions effectively. The firms must control the supply of their respective products or services to raise the demand and thus control what the consumers will be willing to pay for the product (Saeedi et al., 2017).

References

Ciliberto, F., Murry, C., & Tamer, E. T. (2016). Market structure and competition in airline markets.

Mankiw, N. G. (2014). Principles of macroeconomics. Cengage Learning.

Merhav, M. (2017). Technological dependence, monopoly, and growth. Elsevier.

Saeedi, H., Wiegmans, B., Behdani, B., & Zuidwijk, R. (2017). European intermodal freight transport network: Market structure analysis. Journal of Transport Geography,