Comparison of Perfect Competition and Monopoly Essay

Comparison of Perfect Competition and Monopoly - Essay Example This essay describes two of the market structures, such as perfect competition and monopoly by comparing and contrasting the various defining characteristics of both structures. Economics classify markets, according to the industry within which the firms work and how they affect the overall economy of the country. However, on the other hand, industry is the combination of various economic variables, which determine the overall nature, characteristics as well as extent of the competition within that particular industry. There are different market structures which define the various and unique characteristics of the different market structures present in the economy. Monopoly and perfect competition are two of the most important market structures which are present in the economy offering different advantages and disadvantages to the consumers. Perfect competition is a market structure in which there are large numbers of fully informed buyers and sellers of a homogenous product with no obstacles to entry or exit of firm in the long run. Monopoly is often characterized by the market power where monopoly as the ability to influence the market specially in terms of the total quantity produced and sold in the market. It is believed that perfect competition is something where resources are efficiently utilized and efficiency is achieved as perfect market tends to maximize the total utility of the consumers. Monopoly firm has the ability to charge higher prices which ultimately reduce the consumer surplus for the firm.

Micro economics homework Assignment Example | Topics and Well Written Essays - 500 words

Micro economics homework - Assignment Example Another comment the journalist made is that security screening should be shared by the rich and the poor alike. This notion is acceptable since airline companies guided by the principles of profit making by minimizing their costs and thus, they would not agree to this notion. It will be expensive to provide uniform security checks without comprising the quality of their services as a result airline3 companies won’t be able to meet the needs of the rich. The best way to do this is by government subsidizing the services offered by these airline organizations therefore sharing costs. This will minimize the operation costs of the organization resulting into equality in provision of services. The last comment is based on the government interference in making this class based discrimination formal (Lind, 1). This notion is uncalled for since the role of the government is to take care of the economic needs of its citizens equitably. The government can mitigate the rise of discriminative policies in relation to security checks by initiating price control measures in the provision of such services for the aim of preventing exploitation of the rich through exorbitant air fares and reduction of class based air travel. However, this move is likely to fail because the American State has a liberal economy where the market determines the prices of goods and services. There are a variety of reasons as to why the airlines offer priority based on frequency of flying, and one major reason is to improve its profits. Airline companies don’t care a person’s age cluster, femininity or disabilities; their driving factor is the ability of a person to use their services. Therefore they offer incentives with the aim of retaining their clients. By offering priority of its clients through their frequency of flying, the airline companies are practicing the principles of absolute