Micro case Study Example | Topics and Well Written Essays - 500 words

Micro - Case Study ExampleMonopolies are apt(p) the rights to be the only firms in operation as a result of various barriers to entry into the industry. The major barriers are permits or licenses, ownership of key resources, copyrights and patents, high start up cost and creation offered subsidies.Monopolies whitethorn also come across barriers in going bring out of the food market, whereby they are restricted from exit from the market if they are responsible for producing an important product. (Musgrave et al, 41). If a government concludes that products manufactured or provided by such firms are indispensable for the benefit of citizens then such monopoly could be halted from exiting because it improves the living standards of people.Monopolies are also characterized by being in charge of technological knowhow used in production or information, which is not available to authorization competitors. In addition to this, monopolistic enterprises might have some information or te chnology, which is not cognize to others. The technology or information may or may not be solely possess and it could even be a secret formula, which could be a unique way of producing the distinctive product, which bequeath leave other firms in no position to produce the sameThe key source of a monopoly are the hurdles to entry, which originate from sources such as ownership of key resources and patents, whereby the government may ease off individual firms the exclusive rights to produce some products. Therefore, production costs will make the only maker more proficient compared to a large group of producers, which will be forced to go out of the market (Musgrave et al, 21).The government can regulate a monopoly so as to prevent heightened prices in a market, and this is achieved by setting the average price of products. The main drawback is that at times the regulated prices are infra average the lend costs incurred, which means that prices are lower than the producers aver age total costs, and in such cases, a firm